Federal Reserve Holds Rates Steady Amid Recent Market Turmoil

Interest rates will remain at historic lows for a while longer. The Federal Reserve voted Thursday to keep interest rates steady, citing recent global economic and financial developments that may restrain economic activity. 'The outlook abroad appears to have become more uncertain of late,' explained Federal Reserve Chair Janet Yellen in a news conference that followed the Fed's decision. 'Heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets. Developments since our July meeting, including the drop in equity prices, the further appreciation of the dollar, and a widening in risk spreads have tightened overall financial conditions to some extent,' said Yellen. She noted that those developments have also put further downward pressure on inflation, which has remained stubbornly below the Fed's 2% objective. But Yellen said that doesn't mean the Fed won't move forward with a rate liftoff soon, after nine years of near zero rates.