Fed keeps rates unchanged, acknowledges economy is 'strong'

WASHINGTON - The Federal Reserve held interest rates steady on Wednesday but left the door open to a further increase in borrowing costs in a policy statement that acknowledged the US economy’s surprising strength but also nodded to the tighter financial conditions faced by businesses and households.

US stocks edged higher following the release of the policy statement while the US dollar pared gains against a basket of currencies. US Treasury yields fell to session lows. The Fed’s latest statement noted that with job gains still “strong” and inflation still “elevated,” the central bank continues to consider “the extent of additional policy firming that may be appropriate to return inflation to 2 per cent over time.”Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. EDT to elaborate on the statement and an economic outlook that, so far, has defied expectations of an imminent slowdown.

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