Economy - Federal Reserve leaves key U.S. interest rate unchanged

WASHINGTON — The U.S. Federal Reserve says strains in financial markets have "increased significantly" but it has kept its key interest rate unchanged.

The central bank said Tuesday it was keeping its target for the federal funds rate, the interest that banks charge on overnight loans, at two per cent.
In a statement, the Fed said "strains in financial markets have increased significantly and labour markets have weakened further."

'Inflation outlook remains highly uncertain': Federal Reserve

WASHINGTON - Text of Tuesday's statement from the U.S. Federal Reserve:

The Federal Open Market Committee decided Tuesday to keep its target for the federal funds rate at two per cent.

Strains in financial markets have increased significantly and labour markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.
The downside risks to growth and the upside risks to inflation are both of significant concern to the committee. The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability





Source : The cannadian press