No the Federal Reserve did not raise interest rates today. In fact they kept rates unchanged at 0.25%. This is good news for borrowers as it means that loans will stay relatively cheap.
The Fed made this decision based on several factors including inflationary pressure and the health of the labor market. Progress has been made in both of these areas but the Fed wants to see more improvement before raising rates.
Inflation is still below the Fed’s target of 2% but it has been creeping up lately. The Fed is keeping a close eye on inflation as they don’t want it to get out of control.
The labor market is also showing signs of improvement but the Fed wants to see sustained growth before raising rates. The unemployment rate is currently at 4.6% which is down from a high of 10% in 2009.
The Fed’s decision to keep rates unchanged is good news for borrowers. If you’re thinking of taking out a loan now is a good time to do it. Rates are still relatively low and they’re not expected to rise anytime soon.
When was the last time the Federal Reserve raised interest rates?
December 2015
How often do members of the Federal Open Market Committee meet?
Eight times a year
What is the primary tool the Federal Reserve uses to influence interest rates?
The Federal Funds Rate
How does the Federal Reserve influence the Federal Funds Rate?
By buying and selling securities in the open market
What is the current target range for the Federal Funds Rate?
0.
25% – 0.
50%
When is the next scheduled meeting of the Federal Open Market Committee?
March 15-16 2016
How many members make up the Federal Open Market Committee?
Twelve
Who chairs the Federal Open Market Committee?
Janet Yellen
Who appoints the chair of the Federal Reserve?
The President of the United States
What is the dual mandate of the Federal Reserve?
Price stability and full employment
Which of the following is not one of the tools the Federal Reserve can use to influence interest rates?
a.
Changing the discount rate
b.
Changing the reserve requirement
c.
Buying and selling securities in the open market
d.
Changing the Federal Funds Rate
Changing the reserve requirement
If the Federal Reserve wants to increase interest rates what would it do?
a.
Buy securities
b.
Sell securities
c.
Hold securities
Sell securities
What are the four main components of the Federal Reserve System?
a.
The Board of Governors
b.
The Federal Open Market Committee
c.
The Federal Reserve Banks
d.
The Consumer Financial Protection Bureau
The Board of Governors The Federal Open Market Committee The Federal Reserve Banks and The Consumer Financial Protection Bureau
What is the primary purpose of the Federal Reserve?
a.
To protect consumers
b.
To generate profits
c.
To stabilize the economy
d.
To protect the environment
To stabilize the economy
Who appoints the members of the Board of Governors?
The President of the United States
