The Federal Open Market Committee said that China’s slow but certain pick-up in the economy along with better US inflation expectations had helped it hold the national interest rate at 0.25 to 0.5 per cent on Wednesday afternoon.
However, it is concerned about sluggish US household spending.
It is also concerned about a possible China-esque situation abroad. But the FEd has yet to make a statement regarding its process to weight the US economy hazards against the chance of positive surprises.
The New York Federal Reserve’s economic modelling indicates the country’s GDP may only grow by 0.8 per cent in the first quarter.
It may also jump during the second quarter with a 1.2 per cent expansion.
Part of its decision to maintain the interest rates are a developing labour market. With further improvements, sluggish sales may increase over time.
The UK-EU referendum where the UK may exit is also a cause of concern for the Federal Reserve’s interest rate decision.
According to analysts, banks needed to benefit from huge rate rises for better net interest margins. The US finance sector faces more losses this year because of postponed rate-increase plans.
Still, the outlook is that it is by June or July that the interest rates may still increase.