Fed leaves rates unchanged, signals 2016 hike still likely

WASHINGTON (Sept 22): A divided Federal Reserve left its policy rate unchanged for a sixth straight meeting, saying it would wait for more evidence of progress toward its goals, while projecting that an increase is still likely by year-end.

"Near-term risks to the economic outlook appear roughly balanced," the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington. "The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives."

The decision extends US central bankers' run of getting cold feet amid risks from abroad and inconsistent signs of economic strength. Now the focus may shift to December as the Fed's likely last chance to raise interest rates in 2016 - a move that depends on how the economy, inflation and markets fare in the months surrounding a contentious presidential election.

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