WASHINGTON — The Federal Reserve is keeping a key interest rate unchanged in light of global pressures that risk slowing the U.S. economy.
As a result, Fed officials are forecasting that they will raise rates more gradually this year than they had envisioned in December. The officials now foresee two, rather than four, modest increases in their benchmark short-term rate during 2016.
The Fed on Wednesday said the economy has continued to grow at a moderate pace but that the global economy and financial markets still pose risks.
Offsetting the threats, the Fed said in a statement after a policy meeting that it foresees a further strengthening in the U.S. job market. It also expects inflation, which has stayed persistently low, to reach the Fed’s 2 percent target in two to three years.
Since raising its key rate from a record low in December, the Fed has held off on raising rates again given market jitters and a sharp slowdown in China.
The Fed’s decision was approved 9-1, with Esther George, president of the Fed’s Kansas City regional branch, dissenting.
The statement said George favored a quarter-point rate hike now.
