Fed Cites These 3 Factors Behind Last Week’s Decision

Uncertainty about the Federal Reserve’s decision on interest rates weighed on markets last week, pushing the Dow and the S&P lower. For the week, the S&P 500 lost 0.15%, the Dow fell 0.29%, while the NASDAQ gained 0.10%.(1)

On Thursday, the Federal Reserve voted to hold interest rates steady at near zero for at least another month. Did the Fed choke or are officials just being cautious? It’s hard to say, but we now know that recent global economic events are an official problem for the U.S. Though the Fed economists believe the labor market and other sectors of the U.S. economy are doing well, they cited three factors in their decision to keep rates low:(2)

1. Weakening inflation pressure because of falling oil and gasoline prices, as well as a stronger dollar.

2. Recent global events like China’s surprise Yuan devaluation and recent economic reports that raise concerns about slowing worldwide.

3. Financial developments like the recent stock market correction.

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