US Federal Reserve keeps interest rates unchanged

The US Federal Reserve held interest rates steady on Wednesday and its economic forecast suggests no need for cuts in the immediate future if current conditions hold.

Employment is strong, consumer spending is solid and inflation is low, underscoring the current strength of the economy, the Fed said.

"The committee has decided to maintain the target range for the federal funds rate at 1.50 to 1.75 percent," the Federal Open Market Committee, or FOMC, said in a statement at the conclusion of its two-day meeting on Wednesday.

"The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the 2 percent objective."

The FOMC voted 10-0 to hold rates steady, its first unanimous vote since May.

At a news conference after the Fed meeting, chairman Jerome Powell said: "In order to move rates up, I would want to see inflation that's persistent and that's significant. That's my view."

But he cautioned that there is no rule on raising interest rates, and the Fed will change course if necessary.

"We haven't tried to turn it into some sort of official forward guidance," Powell said. "It happens to be my view that that's what it would take to want to move interest rates up in order to deal with inflation."

In previous remarks, Powell has pointed to the worldwide economic slowdown and the continuing trade dispute with China as threats to the US economy. Those factors remain.

The Fed cut rates by a quarter of a percentage point in each of three separate actions this year after raising rates four times in 2018. The Federal Reserve, an independent agency, is charged with creating the conditions for a strong economy and stable currency.

Last spring, US President Donald Trump said the economy would take off "like a rocket ship" if the Fed cut rates sharply. Last summer, Trump urged the "boneheads" at the Federal Reserve to cut interest rates by a full point. The Fed ignored Trump's comments.

A strong economy is key to the president's re-election prospects in 2020. Last week, the US Labor Department announced that employers added 266,000 jobs in November. The unemployment rate dipped to 3.5 percent, a 50-year low.

Looking ahead, the Federal Reserve expects US gross domestic product, the value of all goods and services produced, to increase between 1.8 percent and 2.3 percent in 2020 and between 1.7 percent and 2.2 percent in 2021.

The unemployment rate is expected to range between 3.3 percent and 3.8 percent this year and 3.3 percent and 4 percent in 2021.

Inflation for personal consumption expenditures, or price changes for household goods and services, is expected to range between 1.7 percent and 2.1 percent in 2020 and 1.8 percent and 2.3 percent in 2021, the Federal Reserve forecast.