Washington, Nov 2 (IANS) The US Federal Reserve has left its benchmark interest rates unchanged amid speculation about President Donald Trump’s appointment of next Fed Chair.
The US labor market “has continued to strengthen” and economic activity “has been rising at a solid rate” despite hurricane-related disruptions, the Fed’s policy-making committee said in a statement released on Wednesday, after its two-day meeting, Xinhua news agency reported.
Citing past experiences, the central bank said the hurricanes, which hit the Gulf Coast in late August and September, are “unlikely to materially alter the course of the national economy over the medium term.”
The US economy grew at an annual rate of 3 per cent in the third quarter of the year, slightly lower than the 3.1 percent in the previous quarter, the Commerce Department reported last week.
In view of realized and expected labor market conditions and inflation, the central bank decided to maintain its target range for the federal funds rate at 1 to 1.25 per cent.
The Fed’s decision comes one day before Trump plans to announce his pick for the next leader of the central bank.
“I’ll be announcing tomorrow the new head of the Federal Reserve… I think you’ll be extremely impressed by this person,” Trump said on Wednesday at the Cabinet meeting.
Trump has recently finished interviews of five candidates for the next Fed Chair, including current Fed governor Jerome Powell, Stanford University economist John Taylor, former Fed governor Kevin Warsh, White House National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, whose term expires next February.
Multiple US media outlets reported Trump is most likely to nominate Powell, a Republican and former US Treasury official, for the post.
If Trump does nominate him, Powell is likely to continue Yellen’s gradual and cautious approach to tightening monetary policy.
“If Trump nominates Powell to replace Yellen it will imply continuity in the Federal Reserve’s interest rate and the balance sheet policy, at least for a time,” said Lewis Alexander, US chief economist at Nomura.
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