Fed Doesn't Raise Interest Rates

The Federal Reserve just adjourned a two day meeting with a 7-3 vote to leave interest rates unchanged for the time being. Janet Yellen, the Fed's chairwoman, acknowledged the economy's progress, claiming the decision did not indicate a lack of faith in the economy's growth, but rather that she saw it having "a little more room to run than might have previously been thought".  These remarks are in line with the relatively strong consumer spending and labor force participation, but inexplicably weak business investment that the US has seen. The decision passed despite three dissenters, a narrower margin than most Fed actions. Those who were not on board seem largely concerned that the Fed is taking too long to act, meaning it will eventually have to raise interest rates more sharply later on, possibly contributing to a recession. Inflation has remained quite low in the US, though not as low as in Japan and Europe, where central banks are still struggling to see positive numbers at all. The Fed has two more meetings before the end of the year, one in November, just days before the presidential election, and one in December. It is largely expected to raise rates on one of these two occasions, more likely in December so as not to be seen as influencing politics. Since inflation has still been so sluggish, I personally think is okay not to act until the end of the year, as long as it does so then regardless of the political situation or other factors. While business investment could be stronger, keeping interest rates at near zero levels has likely done most of what it can.

http://www.nytimes.com/2016/09/22/business/economy/fed-interest-rates-yellen.html?ref=business&_r=0