WASHINGTON (AP) – So what will it take for the Federal Reserve to finally raise interest rates?
The U.S. economy is now in its seventh straight year of expansion. It’s growing at a steady if unexciting 2.2 percent annual rate. Unemployment has sunk from a 10 percent peak to a reassuring 5.1 percent. Auto and home sales have accelerated.
Yet on Thursday, Fed officials declined to lift rates from record lows.
The decision left some Fed watchers mystified over what the central bank needs to see to begin phasing out a policy it launched in 2008 to help save a collapsing economy. Many consumers and businesses wouldn’t even likely feel the consequences of a single rate hike, at least not immediately. And Yellen has stressed that the Fed’s rate increases would be modest and gradual.
At a news conference, Yellen declined to spell out what exactly would give the Fed enough confidence to raise the federal funds rate – the interest that banks charge each other – from near-zero.