US Federal Reserve leaves interest rates unchanged

The US Federal Reserve has voted to leave interest rates unchanged.

It follows months of anticipation that September may be the month for
the first rate hike in nine years.

America's central bank said global economic problems and low inflation
meant they would hold off raising rates.

Nick Harper reports from New York.


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TAKE VO
To raise or not to raise. That was the question as Federal Reserve
Chair Janet Yellen arrived for the second and final day of
discussions.
But in a 9 to 1 vote the Fed officials decided the economy is not
quite strong enough to handle a rise.

SOT - Janet Yellen, US Federal Reserve Chair: "In light of the
heightened uncertainties abroad and the slightly softer expected path
for inflation the committee judged it appropriate to wait for more
evidence."

TAKE VO
There's never an obvious, easy time to raise rates. But the feeling
was now is certainly not the right moment. Several weeks of volatile
global stocks markets, prompted by problems in China and the devaluing
of its currency, left many Fed watchers, like Douglas McIntyre of 24/7
Wall St, convinced a September rise was not viable.

SOT - Douglas McIntyre, 24/7 Wall St: "Outside the United States, the
facts right now, the stock markets, the price of oil, currencies, so I
think they had an eye on China where there could be a lot of trouble."

TAKE VO
The Fed has left rates unchanged at nearly zero since the 2008
financial crisis. On Thursday it said it still wants to see a stronger
labor market and feel more confident of a return to 2% inflation.
TAKE VO
Ahead of the announcement Wall St rallied, seemingly convinced a rate
hike was no longer likely.
Yet some analysts like Charles Ortel, the Managing Director of Newport
Value Partners, feel the Fed needs to get on with what it's been
threatening, in an attempt to help balance the books.

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SUPER
Charles Ortel, Managing Director, Newport Value Partners
"People are beginning to understand that equities, common stock
prices, the prices are pushed way too high. And they've been supported
by these low interest rates. Governments can not keep them forever
low. When governments get in trouble, when currencies get in trouble,
they have to raise interest rates and that's what we're in now, a
global interconnected financial crisis."

TAKE VO
The Fed next meet in October, but there are some predictions that
rates may now be on hold until the new year. Douglas McIntyre again.

SOT - Douglas McIntyre, 24/7 Wall St: "You're not going to have a big
change in the American economy in the next 3, 5, 6 months because
there's no catalyst. What's going to happen. And the answer is
nothing. So again I think the Fed is looking outside the US and asking
themselves the governors, are there things that could impact the
entire world."

TAKE VO
The run up to this Fed D-Day has really been all about the hype.
Months of anticipation, weeks of speculation. But when it came down to
it the Fed decision day was like every other in recent years - no
change for interest rates.
SOC

ENDS