FAIRFIELD COUNTY, Conn. -- The Federal Reserve left key interest rate unchanged on Thursday, citing global problems and low inflation.
The decision was one of the most anticipated by The Fed recent years. Interest rates set by the Fed have not changed appreciably since 2008.
Steven Glazer, a professor of economics at Norwalk Community College, said he was not surprised at the Fed's decision. "There has been a lot of debate going both ways whether they would do it this week,'' Glazer said. "With the stock market volatility of the last few weeks and what was going on in China, a lot of people were becoming skeptical that they would raise interest rates."
In its policy statement, the Federal Open Market Committee said an interest-rate increase will come after “some further improvement in the labor market” and when officials are “reasonably confident” inflation will move back to the central bank’s 2 percent annual target.
Fed chairman Janet Yellen said she still anticipates raising interest rates this year, despite recent uncertainty in global economies and financial markets. She said the The Fed still expects moderate GDP growth, continued reduction in slack in the labor market and inflation remaining below target for the next several years.
"Interest rates are low, and have been low,''" said Gregg Wagner, regional vice president for Coldwell Banker Residential Brokerage in Connecticut & Westchester County. "Even if they had raised it, rates are still at historic lows. We’re happy they didn’t, but if they did, I don't’ think it would have that been influential on the market."
The interest rate set by the Fed is one consideration that often impacts the purchase of real estate.
"Interest rates sometimes affect and sometimes it doesn’t real estate transactions,'' said Brad Kimmelman, Brokerage Manager for William Pitt Sotheby's International Realty in Southport. '"It’s still a great time to buy. I think we bought a little bit of time."
The Fed did upgrade its outlook for the economy with a projected growth of 2.1 percent, an increase from its previous projection of 1.9 percent. Unemployment has also fallen, down to 5.1 percent after reaching 10 percent in 2009.
Glazer said he's confident the Fed will raise interest rates at an upcoming meeting. The Board meets again in October and December.
"A month ago everyone was predicting today would be the day,'' Glazer said. "Now they are saying it will happen this year. If my little crystal ball was working well I could predict the future, but we just don't know. We'll have to wait and see."
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