Fed keeps key rate unchanged and pledges to be ‘patient’
Published 7:52 am Thursday, January 31, 2019
WASHINGTON — The Federal Reserve is keeping its key interest rate unchanged and signaling that it could leave rates alone in coming months given economic pressures and mild inflation. The Fed also says it’s prepared to slow the reduction of its bond holdings if needed to help the economy.
The central bank said Wednesday that it plans to be “patient” about future rate hikes. Its benchmark short-term rate will remain in a range of 2.25 percent to 2.5 percent after having been raised four times last year. The Fed’s key rate influences many loan rates for businesses and consumers, including mortgages.
Investors cheered the Fed’s message after its latest meeting that it foresees no need to raise borrowing rates anytime soon even while the economy remains on firm footing. The Dow Jones Industrial Average, which had already been up strongly, surged about 200 points once the Fed statement was released and was up about 460 points nearly an hour later.