Fed holds rates steady as 2 rate hikes expected in 2016

After Fed's announcement, the U.S. dollar dropped below 2.89 against the Turkish lira from 2.91

Baku. 17 March. REPORT.AZ/ The Federal Reserve is keeping a key interest rate unchanged in light of global pressures that risk slowing the U.S. economy, Report informs.

As a result, Fed officials are forecasting that they will raise rates more gradually this year than they had envisioned in December. The officials now foresee two, rather than four, modest increases in the Fed's benchmark short-term rate during 2016.

Offsetting the threats, the Fed said in a statement after a policy meeting that it foresees a further strengthening in the already solid U.S. job market. It also sees an eventual pickup in inflation, which has remained below the Fed's target rate.

Since raising its key rate from a record low in December, the Fed has held off on raising rates again given market jitters and a sharp slowdown in China.

Resuming its rate hikes too soon could slow growth or rattle investors again. This week, the government said that retail sales slipped in February and that Americans spent less in January than it had previously estimated. The report suggested that consumers remained cautious about spending despite a solid job market and lower gas prices.

The Fed's decision was approved 9-1, with Esther George, president of the Fed's Kansas City regional branch, dissenting. The statement said George favored a quarter-point rate hike now.

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