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1st LD: Fed keeps interest rates unchanged as widely expected

Xinhua, March 17, 2016 Adjust font size:

The Federal Reserve on Wednesday kept its benchmark short-term interest rates unchanged as widely expected, noting that "global economic and financial developments continue to pose risks" to the U.S. economy.

In December, the Fed raised its target range for the federal funds rate at 0.25 percent to 0.5 percent, the first rate hike in nearly a decade, marking the end of an era of extraordinary easing monetary policy.

But the turmoil in financial markets and a slowdown in global economy since the start of the year has raised increased concerns about the strength of the U.S. economy, forcing Fed policymakers to hold off on any further rate hikes since then.

"We should not take the strength in the U.S. labor market and consumption for granted," Fed governor Lael Brainard said in a speech earlier this month. "From a risk-management perspective, this argues for patience as the outlook becomes clearer."

The Fed's updated projections released Wednesday showed that policymakers expected the federal funds rate to rise to 0.9 percent at the end of 2016, implying two quarter-percentage-point rate increases this year, down from four estimated in December. Endit