Thursday, September 17, 2015

Fed Stays at Zero, Partly Because of China

The Fed was bound to surprise someone no matter what it decided about interest rates today. The decision in the end was to keep interest rates steady around zero. The economic turmoil in China is thought to have weighed heavily on the Fed’s decision, though it did not specifically mention China in its commentary, only “recent global economic and financial developments.” That vaguely worded rationale was clear enough for China to make it into some of the headlines on the Fed decision. It is rare for the Fed to reference developments outside the country in its interest rate actions, though it has happened before.

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