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Fed Holds US Interest Rates Steady


Traders work as Federal Reserve Chair Janet Yellen speaks on a television above the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York City, June 15, 2016

Top officials of the U.S. central bank are holding interest rates steady at a relatively low level in a bid to keep stimulating the economy, which has been slow to recover from the recession.

Federal Reserve Chair Janet Yellen told journalists this action "should support further progress toward" full employment and stable prices.

Yellen said labor market improvements "have slowed," and some business investment has been disappointing. She also predicted that consumer spending, a key driver of U.S. economic growth, will rebound and the economy will move from a "lackluster" to a "moderate" growth rate over the next few years.

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Fed Keeps Rates Unchanged, Cites US Hiring Slowdown, Concerns Over UK Brexit
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During the recession, the Fed cut rates nearly to zero, and raised them slightly to about half a percent late last year.

The Fed calls that "highly accommodative," which means it is expected to make it cheaper and easier for companies and families to borrow the money they need to buy new equipment or houses. Such activity helps the economy grow.

Some economists have expressed worry that keeping interest rates too low for too long might spark damaging inflation. But so far, that has not happened, and inflation is below the two percent rate Fed officials think is best.