Federal Reserve holds key interest rate at 2-2.25%

Japan Economic Newswire |

The Federal Reserve on Thursday left its benchmark short-term interest rate unchanged and reaffirmed a plan to continue raising borrowing costs at a gradual pace.

The U.S. central bank maintained its target range for the federal funds rate at 2 to 2.25 percent, it said in a statement released after a two-day meeting of the policy-setting Federal Open Market Committee.

Given firmness in the U.S. economy and the labor market, financial markets expect the Fed to raise interest rates at its next FOMC meeting in December following an increase in September.

The statement gave upbeat assessments of the world's largest economy, saying the labor market "has continued to strengthen" and that economic activity "has been rising at a strong rate."

Household spending has continued to grow strongly, while capital spending has moderated from its rapid pace earlier this year, it said.

"The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the committee's symmetric 2 percent objective over the medium term," it said.

"Risks to the economic outlook appear roughly balanced."

The Labor Department said last week that the economy generated a larger-than-expected 250,000 jobs in October and the jobless rate was at 3.7 percent, the lowest level in over 48 years.

==Kyodo

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