Both the Federal Reserve and the European Central Bank announced their latest interest rate decision this week, both deciding to leave their respective policy rate unchanged, albeit at different levels.
Following three successive rate cuts on August 1, September 19 and October 31, the Federal Open Market Committee under Chairman Jerome Powell decided to keep the federal funds rate stable at 1.5 to 1.75 percent. “We believe that the current stance of monetary policy will support sustained growth, a strong labor market, and inflation near our symmetric 2 percent objective,” Chairman Powell said in his official statement, adding that “the current stance of monetary policy likely will remain appropriate, as long as incoming information about the economy remains broadly consistent with [the committee's current] outlook."
Meanwhile the European Central Bank also decided to keep the key interest rates unchanged, meaning that the interest rate for main refinancing operations will remain at 0.00 percent. It has now been there since March 2016, as our chart illustrates.
