Fed Leaves Interest Rates Unchanged For Third Time In Four Meetings

(RTTNews) - For the third time in the past four meetings, the Federal Reserve on Wednesday decided to leave interest rates unchanged.

The Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent in an effort to support its dual goals of maximum employment and inflation at a rate of 2 percent over the longer run.

The widely expected decision comes after the Fed also left rates unchanged at its June and September meetings. The central bank raised rates by a quarter point in July.

The accompanying statement was little changed from September, although the Fed did upgrade its assessment of U.S. economic activity.

The Fed said recent indicators suggest economic activity expanded at a "strong pace" in the third quarter after previously saying activity has been expanding at a "solid pace."

The latest statement also said, "Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation."

The Fed's September statement only cited "tighter credit conditions," with the inclusion of "financial" coming amid the recent surge in treasury yields.

With regard to the outlook for rates, the statement suggests the Fed is still considering additional rate hikes in an effort to return inflation to its 2 percent objective.

The central bank said it will consider the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments in determining whether further increases may be appropriate.

The Fed's next monetary policy meeting is scheduled for December 12-13, with CME Group's FedWatch Tool currently indicating an 80.1 percent chance rates will remain unchanged and a 19.8 percent chance of a quarter point rate hike.