To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress—both realized and expected—toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
The decision comes after much anticipation—largely because it would have been the first time the Fed raised interest rates in nine years.
There was an economic case to be made for keeping rates low, as well as to gradually raise them. According to a survey of private economists by the Wall Street Journal, 52 percent of private economists believed a rate increase would not happen today.