The Federal Reserve is keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. Wrapping up a closely watched meeting Thursday, Fed officials say that while the U.S. job market is solid, recent global developments may “restrain economic activity” and further drag down already low inflation. Western Michigan University finance professor Christopher Korth says a higher rate would eventually send rates up on many consumer and business loans.
Signs of a sharp slowdown in China have intensified fear among investors about the U.S. and global economy. And low oil prices and a high-priced dollar have kept inflation undesirably muted. Before year’s end, many analysts still expect the Fed to raise its key short-term rate, which it’s kept near zero since 2008.
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