Fed holds line on rates, says no more hikes ahead this year

The Federal Reserve decided Wednesday to hold interest rates steady and indicated that no more hikes will be coming this year. In a unanimous move that coincides with market expectations and demands, the central bank’s policymaking Federal Open Market Committee took a sharp dovish turn from policy projections just three months earlier.

After the announcement, 10-year Treasury yields fell to their lowest level in a year. Committee members had estimated in December that two rate hikes would be appropriate in 2019 after four increases in 2018. They also pointed to at least another one before ending a round of policy tightening that began in December 2015.

However, there now appears to be no likelihood of a hike unless conditions change significantly. In its post-meeting statement, the FOMC indicated it would remain “patient” before adopting any further increases.

The Fed currently holds its benchmark funds rate in a range of 2.25 percent to 2.5 percent. The rate is used as a key for determining interest on most adjustable-rate consumer debt, like credit cards and home equity loans.

The Fed had held its benchmark rate near zero for seven years as it looked to stimulate the housing market and overall economic activity. Its low-rate programs coincided with the longest bull market on record for stocks.

Fed holds line on rates, says no more hikes ahead this year, CNBC, Mar 21