The Federal Reserve on Wednesday announced its intentions to pump the brakes on expected key interest rate increases.
The central bank’s Federal Open Market Committee revealed that in June it decided global economic headwinds and less-than-ideal levels of unemployment should decrease the possibility of an imminent hike. It singled out fixed investments and net exports as having “stayed soft.”
“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term,” the FOMC said in a statement.
It did note, however, that the housing market “has shown additional improvement.” Data released by the earlier this week showed that homeownership rates had fallen in the second quarter of this year to historic lows.
American exporters have, in recent months, had to contend with poor economic performances in two of their largest markets. Canada could already be in recession. China, meanwhile, is currently grappling with intense financial instability.
While both are net-exporters to the United States, they purchase large amounts of American commodities–about $420 billion worth in 2013.
In March, the FOMC said it increased the chances it would soon raise interest rates. Fed Chair Janet Yellen noted, however, that any move to increase the cost of borrowing would be “data dependent.”
