Federal Reserve officials left interest rates unchanged, opting to delay an increase amid stubbornly low inflation, an uncertain outlook for global growth, and recent financial-market turmoil.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the Federal Open Market Committee (FOMC) said in a statement Thursday in Washington.
In holding their benchmark federal funds rate at zero to 0.25 percent, policy makers showed they are still not convinced inflation will move gradually back to their 2 percent target, despite continued gains in the labor market. Unemployment in August fell to 5.1 percent, its lowest level since April 2008.
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“On balance, labor market indicators show that underutilization of labor resources has diminished since early this year,” officials said.
Richmond Fed President Jeffrey Lacker dissented, saying he preferred to raise the target rate by 0.25 percentage point.
Many economists have worried that recent losses in China's equity markets reflect deeper worries over growth prospects for the world's second-biggest economy. Slowing demand from China has also helped trigger a global slump in commodity costs, adding downward pressure to prices in the U.S.
Inflation, as measured by the Fed's preferred gauge, was 0.3 percent in the 12 months through July and has lingered below 2 percent for more than three years.
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