The Fed decided over its two-day meeting to scale back planned interest rate hikes, citing weak global growth and US financial turmoil.
The Federal Open Market Committee kept the target range for the federal funds rate between 0.25 and 0.5%, while the median of policymakers’ updated quarterly projections predicted a 0.875% rate by the end of 2016.
The two 50 bps increases over the year is down from a 100 bps increase the Fed forecast in December, Bloomberg reports.
The shift in Fed policy reflects slow global growth and heightened interest rate spreads across different levels of lending risk—i.e. tightening credit conditions, Fed Chair Janet Yellen announced after the meeting. [Bloomberg]
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