US central bank keeps interest rate unchanged

The US central bank has decided to hold interest rates steady and keep them at the same level since December 2008, the BBC News reported.

The Federal Reserve said nine members of its Federal Open Market Committee voted to hold the key federal funds rate target at 0 to 0.25%.

Committee member Jeffrey Lacker was the only dissenter, favouring a 0.25 percentage point rise.

The Fed made it clear that concerns about the strength of the global economy had influenced its decision.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the committee said in a statement.

Signs of weaker growth and stock market turmoil in China have led to fears among investors about US economic growth.

"We've long expected to see some slowing in Chinese growth over time as they rebalance their economy. There are no surprises there. The question is whether or not there will be a risk of a more abrupt slowdown than most analysts expect," Fed chairwoman Janet Yellen said at a press conference.

The Fed's long-term policy is to keep interest rates low until employment levels improve further and the main US inflation rate approaches its 2% target.
Inflation is currently at about 1.2% in the US, kept down by cheaper oil and a strong dollar.

The central bank said that it still wants to see more improvement in the labour market, even though recent data showed that the unemployment rate for August was 5.1%, the lowest since 2008.