The Federal Reserve is still waiting for the right moment. In a decision that could have gone either way, the Fed decided not to raise its key interest rate in September. America’s central bank hasn’t raised rates in almost a decade and rates have been stuck near zero since the depths of the financial crisis in December 2008.
Concerns about a global economic slowdown, low inflation in the U.S. and volatile stock markets in August lowered the chances of a September rate hike. The Fed’s inaction Thursday appears to confirm that those fears weighed on its decision despite a U.S. economy that’s strengthening overall. “Recent global economic and financial developments may restrain economic activity somewhat,” the Fed’s committee said in a statement. Although they didn’t raise rates now, the majority of Fed committee members believe there will be a rate hike in 2015, according to its economic projections. The committee has two remaining meetings this year — in October and December.
Overall, the Fed does sound more optimistic about the U.S. economy. The Fed’s committee raised its expectations for economic growth this year to 2.1% from 1.9%, and it lowered its projection for the unemployment rate by the end of the year to 5%. Currently, unemployment is 5.1%. Still, it wasn’t enough to raise rates in September.