US Federal Reserve keeps rates steady, Latest Business News - The New Paper

US Federal Reserve keeps rates steady

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WASHINGTON: The Federal Reserve held interest rates steady on Wednesday at its first policy meeting of the year, with the head of the US central bank pointing to continued moderate economic growth and a "strong" job market, and giving no sign of any imminent changes in borrowing costs.

"We believe the current stance of monetary policy is appropriate to support sustained economic growth, a strong labour market and inflation returning to our symmetric 2 per cent objective," Fed Chair Jerome Powell said at a news conference following the central bank's unanimous decision to maintain the key overnight lending rate in a range of between 1.50 per cent and 1.75 per cent.

He noted signs that global economic growth was stabilising and diminishing uncertainties around trade policy, concern about both of which were key factors in the Fed's decisions to cut rates three times last year.

But he added that "uncertainties about the outlook remain, including those posed by the new coronavirus".

The outbreak of the new virus in China, causing flu-like symptoms, has led to fears of a further slowdown in the world's second-largest economy.

After ticking off a list of positive developments, including the initial trade agreement reached recently by the US and China and some indication a slip in global manufacturing has hit bottom, Mr Powell noted China's economy would see at least a short-term hit from the coronavirus outbreak.

"We are very carefully monitoring the situation," Mr Powell said, adding that while the implications of the outbreak for China's output are clear, it is "too early" to determine its global effect or impact on the US economic outlook. - REUTERS