US Federal Reserve keeps interest rate unchanged

NEW YORK

The Federal Reserve on Wednesday kept its benchmark interest rate range unchanged at 0.25-0.50 percent at the end of two days of meetings.

"Economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months," the Fed said in a statement.

The bank noted that although inflation picked up in recent months, it continues to run below the Committee’s 2 percent objective, due to declines in energy prices and in the cost of non-energy imports.

Stressing that global economic and financial developments continue to pose risks for the U.S. economy, the Fed expects inflation to remain low in the near term, but to rise to 2 percent over the medium term as "transitory effects of declines in energy and import prices dissipate and the labor market".

The Fed in December increased the benchmark Federal Funds rate to 0.50 percent from 0.25 percent, marking the first rate hike in almost a decade.

U.S. stocks and oil prices reacted positively to the news with the Dow, S&P and Nasdaq gaining 0.16 percent, 0.12 percent and 0.21 percent, respectively.

Global benchmark Brent oil price climbed above $40 per barrel, while American benchmark reached $38. The Euro gained against the dollar -- moving from 1.1088 to 1.1170 after the Fed’s announcement. The U.S. dollar fell against the Turkish Lira, from 2.9134 to 2.8865.

NEW YORK

The Federal Reserve on Wednesday kept its benchmark interest rate range unchanged at 0.25-0.50 percent at the end of two days of meetings.

"Economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months," the Fed said in a statement.

The Fed in December increased the benchmark Federal Funds rate to 0.50 percent from 0.25 percent, marking the first rate hike in almost a decade.

U.S. stocks and oil prices reacted positively to the news with the Dow, S&P and Nasdaq gaining 0.16 percent, 0.12 percent and 0.21 percent, respectively.