Fed Holds Interest Rates Steady--Says Higher US Rates Would Jepardise World Economy-[picture]

The Fed’s federal funds rate — the interest rate the Fed charges for banks to lend to one another overnight — will remain at target rate of 0.0-0.25 percent, where it has been since December 2008 at the height of the financial crisis. The Federal Open Market Committee (FOMC), the central bank body charged with adjusting key rates, will have its next chance to adjust the influential interest rate when it meets again on Oct. 27 and 28.

By leaving the key interest rate untouched, the Fed is deliberately maintaining economic demand by preserving the current low cost of credit for consumers and businesses. If the Fed had raised rates, it could lower demand for goods and services, which in turn would reduce demand for workers and slow job growth. Fewer available jobs means less competition for workers, limiting wage growth.

The FOMC did not base its decision primarily on concerns about the health of the job market, however.           source