Fed Stands Pat, but Says Case for Rate Increase Has Strengthened

September 21, 2016

Source: Wall Street Journal By JON HILSENRATH and DAVID HARRISON

The Federal Reserve left short-term interest rates unchanged Wednesday, but signaled after a meeting marked by internal divisions that it still expected to raise them before year-end.

Its stance for now underscored the lack of urgency the U.S. central bank’s leadership feels about lifting rates when inflation is lingering below its 2% goal and the unemployment rate is holding steady at a low level just under 5%.

It also showed the challenge faced by Fed Chairwoman Janet Yellen, who is trying to balance divergent views inside the Fed about how to proceed. One camp of policy makers wants to move rates up right away, while another sees no need to raise rates at all this year.

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