Fed Stands Pat On Rates, Will Reduce Balance Sheet In October

(RTTNews) - The Federal Reserve on Wednesday maintained its benchmark interest rate at a range of 1% to 1.25%.

As expected, the Fed said it will begin shrinking its bloated $4.5 trillion portfolio in October by allowing $10 billion in bonds to mature without replacing them.

The portfolio includes Treasury and mortgage-backed securities that were acquired during and after the 2007-09 financial crisis in a successful program to prop up the economy.

Hurricanes are unlikely to materially impact economy in medium term, according to the Fed's statement.

The decision culminated a two-day meeting of the Federal Open Market Committee against the backdrop of stubbornly low inflation and rising geopolitical tensions.

The Fed made no change to its so-called 'dot plot' of rate projections for this year and next, strongly hinting at a December rate hike.

However, the Fed lowered its rate forecast for 2019 to 2.8% from 3%.

Some analysts thought the Fed might would raise interest rates today because of Chairman Yellen's press conference.

With Yellen's commentary able to soothe markets, the Fed raised its benchmark federal-funds rate at its last three press-conference meetings.