Federal Reserve holds interest rates

“If the Fed get this wrong, then gold will rediscover its mojo in a big way”, Chris Weston, chief market strategist at IG, said. While growth remains disappointing by historical standards, the Fed said the economy continued to expand at a “moderate” pace, which was driving “solid job gains and declining unemployment”.

During the session, Twitter shares fell 14.5 percent to a year-low of Dollars 31.24 after the microblogging company said its number of monthly average users rose at the slowest pace since it went public in 2013.

Another statistic closely watched by the Fed is inflation, now officially just 0.1 percent – a statistic many Americans fairly find dubious.

That buoyed the dollar, up 0.4 per cent against a basket of leading currencies, making dollar-priced gold more costly for non-US buyers.

“(The economy) is a bit of a mixed bag on balance”, he says, while adding that the numbers, taken together, support a change in the central bank’s outlook and a rate increase.

And that long-term challenge dwarfs the stakes of when – or if – the Fed finally raises short-term interest rates. The statement noted that the job market, consumer spending and the housing market have all improved.

And Wall Street’s top banks still target September as the most likely time for an initial Fed rate hike, according to another Reuters poll published earlier this month.

But it is still almost double its level at the start of the year.

It kept rates unchanged but opened the possibility of a widely expected liftoff in September when the Federal Open Market Committee meets again.

The FOMC’s members, headed by the chair of the Fed’s Board of Governors, Janet Yellen, voted unanimously Wednesday to leave interest rates unchanged.

The Fed’s June 17 rate projections show the median forecast for their benchmark rate at 0.625 percent by year-end, rising to 1.625 percent in 2016. Meanwhile, Bank Indonesia’s benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.18 percent to IDR 13,468 per US dollar on Thursday (30/07).

She has also said that when rates do begin to rise, the increase will only be gradual. “The bar for them to hiking rates is not very high”. However, limited US inflation is partly caused by the current low petroleum prices, meaning that a rebound in energy prices will automatically push US inflation to the Federal Reserve’s target.

Rates are expected to remain at 0.5% for now, where they have stayed for more than six years, but recent remarks from bank officials have fuelled expectations that there could now be a hike before the end of 2015.

“Given the supportive domestic economic backdrop, we expect this positive momentum in activity to be sustained in the coming months, providing the Fed with the necessary justification to raise rates this year, perhaps as early as September”, Mulraine said.