Federal Reserve officials left interest rates unchanged, opting to delay an increase amid stubbornly low inflation, an uncertain outlook for global growth and recent financial-market turmoil.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the Federal Open Market Committee said in a statement Thursday in Washington.
In holding their benchmark federal funds rate at zero to 0.25%, policymakers showed they are still not convinced inflation will move gradually back to their 2% target, despite continued gains in the labor market. Unemployment in August fell to 5.1%, its lowest level since April 2008.
“On balance, labor market indicators show that underutilization of labor resources has diminished since early this year,” officials said.
The yield on the 10-year U.S. Treasury note fell to 2.23% at 2:10 p.m. in New York following the release of the statement from 2.30% late on Wednesday. The S&P 500 pared earlier gains.