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Fed holds line

Interest rate unchanged as job market sputters

WASHINGTON — The Federal Reserve is keeping interest rates unchanged in light of an uncertain job market and offering no hints of when its next rate hike might occur.

The Fed noted in a statement Wednesday after its latest policy meeting that the pace of hiring has slowed even as the overall economy has improved.

The central bank indicated that it needs a clearer picture of economic developments before raising rates again. It noted that the housing market is improving and that the consequences of an export slowdown have lessened. Yet it signaled its concern about the uncertainty of job growth and global economic developments.

Some economists think a July rate increase is possible if the job market rebounds from a dismal May and financial markets remain calm after Britain’s vote next week on whether to leave the European Union.

“There are too many uncertainties to justify pulling the trigger,” said economist Sung Won Sohn. The Fed “wants to make sure that the surprisingly weak payroll number for May is a temporary phenomenon and not a harbinger of a weaker economy to come.”

Besides issuing a policy statement, the Fed updated its economic forecasts, which show how it foresees rate hikes unfolding in coming months. A survey of the 17 officials found that six think there will be only one rate hike this year, up from just one official who thought so at the Fed’s March meeting. The median expectation remains for two rate hikes this year.

The officials sounded a slightly more downbeat about the economy’s growth this year and next compared with their forecasts three months ago.

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