The Federal Reserve left interest rates unchanged Wednesday and predicted that it will not raise them again for the entirety of the coming year due to a recent slowdown in economic growth.
In a widely anticipated move, the central bank’s policy-making Federal Open Market Committee abandoned its previous prediction, made just three-months ago, of continued strong economic growth that would necessitate two rate hikes this year.
After predicting in December that the economy would continue to grow at 2.3 percent on the year, officials revised their assessment to 2.1 percent. As a result, the benchmark-funds rate will remain between 2.25 percent and 2.5 percent. The Fed has generally kept rates low since the 2008 financial crisis, but began raising them incrementally under Janet Yellen.
The new economic-growth forecast further widens the chasm between the central bank and the White House, which has consistently provided the rosier prediction of 3.2 percent growth this year.
The decision to halt rate hikes will likely please President Trump, who, following the Fed’s December announcement, lambasted Chairman Jerome Powell for threatening the bull market he’s enjoyed since taking office.
It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!
— Donald J. Trump (@realDonaldTrump) December 17, 2018
Powell, for his part, has resisted criticizing the president and has repeatedly asserted the Fed’s independence from the Trump administration.