US Federal Reserve kept the interest rates unchanged following Global Economy

Analysts at Commerzbank said: “As we had anticipated, the US Federal Reserve chose not to raise interest rates yet yesterday”.

Ahead of the meeting, many economists expected what they called a “hawkish hold”, in which the Fed would keep rates near zero while emphasizing that liftoff was coming. Wage gains have been scarce and despite the 5.1 percent unemployment rate nationally, many workers have trouble finding full-time positions and many others are still on the sidelines not looking for work because prospects still look bleak to them. This past Thursday, South Africa’s stocks rose, lifting the benchmark to a record high; the Johannesburg Stock Exchange (JSE) Top- 40 went up 1.2%.

“The reality is that the rate hike is still going to come, whether it´s before the end of the year or in 2016″, he told Bloomberg TV in Hong Kong.

The language used by the Fed is aimed at giving it a high degree of flexibility when it comes to rate decisions. The Committee gathers next on October. 27-28 and again December. 15-16. Levy has analyzed the Federal policy for 30 years now. “I argued against the decision at the FOMC meeting”.

“The case for policy normalization is quite strong, since Committee objectives have essentially been met”, Bullard said in slides prepared for a speech in Nashville, Tennessee.

The Fed also forecast that inflation would creep only slowly toward its 2 per cent target, which could be seen as a negative for gold, often bought as an inflation-hedge.

US stocks tumbled Friday to their biggest one-day loss in two weeks, extending a selloff fueled by worries about global growth. A hike will be imminent if labor-market conditions show “further improvement” and the economy achieves the targeted inflation rate.

In a statement, the Federal Open Market Committee said: “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term”. And emerging economies’ engine of growth – commodities like oil, copper and soy – have fallen off a cliff in the past year.

Gold also competes more easily with interest-yielding assets, like Treasurys, when rates are pinned near zero. Lacker was the sole dissenter to the Fed’s decision. “We know the economic recovery still has not reached working families, and even a small rate increase can have devastating effects on our economic stability”.

“There is not a lot of data”, Bullard said in a question and answer session with reporters. Two of her closest allies had spoken late last month but delivered seemingly contradictory messages just days apart.

“What was problematic is that the Fed introduced a greater measure of concern about global issues”, said Mr Jorge Mariscal, chief investment officer for emerging markets at UBS.