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Research - MARCH 18, 2015

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Fed maintains current rate, leaves door open for a change

by Loretta Clodfelter

The Federal Open Market Committee is keeping the federal funds rate target unchanged at 0–0.25 percent, according to its latest statement released March 18. Furthermore, the FOMC indicated that the rate is unlikely to change at the April meeting — though the Fed opened the door for an increase in the rate in the following months.

In a press conference following the announcement, chair Janet Yellen stated, “We have updated our forward guidance indicating that an increase in the target range for the federal funds rate remains unlikely at our next meeting in April. With continued improvement in the economic conditions, however, we do not want to rule out the possibility that an increase in the target range could be warranted at subsequent meetings.”

Timing of an interest rate increase is of paramount concern. “We don’t want to be premature. &he

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