A divided Federal Reserve, struggling to decide how soon to prune its economic stimulus campaign, said on Wednesday (Sept. 21) that it would wait at least a little longer.
The New York Times reported that the Fed left its benchmark interest rate unchanged after a two-day meeting of its policy-making committee, although most of its officials said they expected to raise rates by the end of the year.
Janet L. Yellen, the Fed’s chairwoman, said she saw no reason to rush. The economy keeps bubbling along without boiling over. “We’re generally pleased with how the economy is doing,” she said at a news conference. “The economy has a little more room to run than might have previously been thought. That’s good news.”
But concern is growing among some Fed officials that the central bank is waiting too long to resume moving borrowing costs back toward normal levels. The decision to wait passed by a vote of 7 to 3, the narrowest margin in almost two years. Yellen said Fed officials had “struggled” to reach a consensus, though she said the disagreement was mostly about a narrow question of timing.
The Fed’s latest round of economic projections reflected a broad consensus; 14 of the 17 Fed officials surveyed anticipated at least one rate increase this year.
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