As expected the US Federal Reserve held its benchmark interest rate steady on Wednesday, as the economy stayed on a moderate growth path.
The central bank’s decision was widely tipped and had little impact on markets, especially after its description of the state of the US economy was unchanged from its final meeting for 2019.
Overnight trading in ASX 200 futures saw a small gain of around 3 points, meaning a soft start to trading this morning. Gold was up to around $US1,576 an ounce and oil was off a few cents a barrel. The Aussie dollar was trading around 67.55, roughly steady on a day earlier.
The bank said the labor market remained strong, growth was helped by consumer spending, and inflation remained below the 2% target.
“Job gains have been solid … and the unemployment rate has remained low,” the Fed’s policy-setting committee said in a statement announcing its unanimous decision to leave the key overnight lending rate in a range of between 1.50% and 1.75%.
The Fed’s assessment of household spending was marked down slightly from a “strong pace” in its December statement to a “moderate” pace in the latest statement. The Fed also noted that business fixed investment and exports “remain weak.”
It did not specifically mention economic risks arising from the recent coronavirus outbreak in China, which has led to fears of a further slowdown in the world’s second-largest economy.
Those fears receded further in the US which is now becoming more absorbed in Donald Trump’s impeachment trial.