Contrary to expectations of higher rates, the Federal Reserve on Thursday said it would be keeping the federal funds target rate the same at 0% to .25%.
“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 Fed said in its statement.
The news may bring a sigh of relief to farmers worried about higher borrowing costs, but it is also likely to cause some volatility in the hours ahead as the market digests the news.
“This is perhaps one of the most anticipated and feared rate hikes in history and speaks to how global markets have become so hooked to central bank activity, rather than free-market forces,” Arlan Suderman of Water Street Solutions, in a midday post before the Fed’s announcement. “The Fed is expected to release its monetary policy statement at 1 p.m. CDT, just ahead of the close in the grain markets, but the bigger market impact may come from Fed Chair Janet Yellen’s press conference 30 minutes later.”
How do you feel about the Fed's decision to leave interest rates the same? Did they do the right thing?