There’s no doubt about the Federal Reserve’s decision revealed this week to leave interest rates as they are at least for the time being.
By a unanimous vote, the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 2 to 2.25 percent.
Policymakers have one more chance this year to adjust interest rates. Their next announcement will arrive on Dec. 19.
The Fed’s actions already are leaving their mark on auto financing. Earlier this month, Edmunds pointed out the average annual percentage rate for new-model deliveries in October rose to the highest level on record since January 2009.
Despite some vehicle buyers getting pinched a little more when they have to finance, committee members are confident in their latest moves as reinforced by their solidarity in approving the holding of the current rate.
“Information received since we met in September indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate,” the committee said in a news released.
“Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year,” policymakers continued.
“On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance,” they added.
Consistent with its statutory mandate, committee members reiterated that they seek to foster maximum employment and price stability.
“The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced,” members said.
“In determining the timing and size of future adjustments to the target range for the federal funds rate, the committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective,” they continued.
“This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations and readings on financial and international developments,” policymakers concluded.