The central bank, which entered the year planning to raise rates four times, has scaled back those plans as economic growth has disappointed expectations.
The Federal Reserve announced today that they would be keeping interest rates steady in light of data that indicates that the United States economy is not recovering at a sufficiently fast pace. The Feds main concerns are over the fact that economic growth has slowed in recent months, and that job growth is weaker than they had originally predicted it to be. Thankfully, there is some good news: spending on housing and consumer goods has improved, which bodes well for the future of the economy.
Now, I understand that most people have very little interest in the operations of the Federal Reserve. Who cares if interest rates went up or down, why not just let economists worry about those kinds of things? I would respond to this by saying that the actions of the FOMC (Federal Open Market Committee), however mundane and boring the may seem, reveal extremely important information about the current state of the economy. In August of last year when the interest rates rose for the first time since the recession of 2008 I had high hopes that 2016 would be the year that the economy makes a decent recovery. However, looking at the recent decision to keep rates steady and predictions that there will be only two further increases this year have led me to revaluate my earlier assessment. What I am trying to say is that the Federal Reserve lets us measure the heartbeat of the economy by reporting monetary policy, and that is a tool that we cannot let go to waste by ignoring it.