Downplays global turmoil; keeps crucial rate unchanged for now
Fed Chair Janet Yellen
Washington: The US Federal Reserve kept interest rates unchanged on Wednesday and in a direct reference to its next policy meeting put a December rate hike firmly in play.
Investors had expected the Fed to remain pat on rates, but the overt reference to December came as a surprise.
The central bank also downplayed recent global financial market turmoil and said that the US labour market was still healing despite a slower pace of job growth.
“In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress — both realised and expected — toward its objectives of maximum employment and 2 per cent inflation,” the Fed said in a statement after its two-day policy meeting.
Sensex dips 200 pts on Fed rate worry:
The equity markets extended their losses for the fourth consecutive day after the US Fed hinted about a possible interest rate hike by the end of this year, which dented investor sentiments. The uncertainty about the outcome of the Bihar election and the mixed second quarter results from India Inc have also turned investors sentiment cautious in the near term. The expiry of October derivative contracts led to high volatility in the domestic bourses.
The Sensex fell 201.62 points to close the day at 26,838.14 while the Nifty closed the session at 8,111.75, shedding 59.45 points. “Election’s outcome is likely to have only a near-term impact, while a tepid Q2FY16 results may lead to further downgrade in FY16 earnings estimate,” said Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services.
( Source : deccan chronicle/reuters )
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