The US Federal Reserve announced this morning it was keeping the cash rate at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets.
There has been much speculation leading to the the announcement about whether the Fed would start raising rates. Besides the wider economic impact, New Zealand banks look at what the Fed is doing as it can influence longer-term home loan rates.
Fed officials sai that while the US job market is solid, global pressures may "restrain economic activity" and further drag down already low inflation. Signs of a sharp slowdown in China have intensified fear among investors about the US and global economy. And low oil prices and a high-priced dollar have kept inflation undesirably low.
