US Fed holds off from raising record low interest rates

But, she said, “we have some concerns about negative impacts from global developments and some tightening of financial conditions”.

That unknown is the worldwide economy. Higher rates could dent demand for non-interest paying bullion, while boosting the dollar.

“The overall economy will be important for small businesses”, Mokrzan said. Furthermore, as Investor’s Business Daily notes, the government has an interest in keeping rates low because of the national debt.

“This is probably a stimulus for a little longer”, Mokrzan said.

Concerns about a global economic slowdown, low inflation in the US and volatile stock markets lowered the chances of a September rate hike.

USA stocks are falling in early trading Friday, following a sharp sell-off in European markets, as investors consider the implications of the Federal Reserve’s decision to hold off raising interest rates.

The Fed will meet next in October and then in December.

Answering questions from journalists on a possible interest rate increase later this year, Yellen said “October, it remains a possibility”. Investors interpreted the Fed’s decision as a signal that the global economy is weak.

The euro moved slightly higher against the dollar to about 1.14 after the announcement.

On real GDP, the following forecast changed were made: Median GDP now 2.1% for 2015, up from 1.9% seen in June….

Nevertheless, 13 of the 17 Fed officials at the meeting indicated they expect a rate hike by the end of this year, majority pointing to a 0.25-0.50 percent range.

Inflation has been running below 2 percent for more than three years.

It further said, “The Committee continues to see the risks to the outlook for economic activity and the labor market as almost balanced but is monitoring developments overseas “. In June, 15 Fed officials had predicted that the first rate hike would occur this year.

While a delayed rate hike only provides a temporary respite for markets across the emerging economies, it sets a solid stage for Reserve Bank of India to cut policy rate further. The rouble weakened, tracking oil prices, down 0.8 percent.

That was underscored by a downward turn in the USA consumer price index on Wednesday, confounding Fed hopes of seeing a pickup in inflation. The Nasdaq Composite (COMP) shed 67 points, or 1.4 percent, to 4,827. Unemployment in August fell to 5.1pc in the United States, its lowest level since April 2008.