The Federal Reserve announced today that it is not ready to raise interest rates, completing a 7th year in which it has held short-term rates near 0.
The Fed’s statement, issued after a 2-day meeting of its policy-making committee, left open the possibility that the Fed will raise rates at its final meeting of the year, in December, but such a change would not go into effect until January. While noting that job growth has slowed, it said that other economic indicators remained relatively strong.
The Fed also signaled that its concerns about the global economy have diminished. In the statement issued after its previous meeting in September the Fed said global economic and financial developments might restrain domestic growth. That language was stripped from the new statement, leaving only an acknowledgment the Fed “is monitoring global economic and financial developments.”
As MetalMiner Lead Forecasting Analyst Raul De Frutos wrote earlier today, this is generally bad news for metal prices and all commodity prices and the longer the Fed delays the more likely it is that when a rate increase does finally happen it will only make the US dollar more attractive to investors seeking yields.
Please follow Jeff Yoders on Twitter @jyoders19