The Federal Reserve appears on track to raise interest rates once more this year but will likely hold off on any action when its latest policy meeting ends Thursday. The Fed is expected to raise rates at its final 2018 meeting in December, with a majority of participants now in favor of the move.
The policymaking Federal Open Market Committee, as expected, unanimously approved keeping the federal funds rate in a range of 2 percent to 2.25 percent. A statement it issued Thursday after its latest policy meeting portrayed the economy as robust, with healthy job growth, low unemployment, solid consumer spending and inflation near the Fed's 2 percent target.
There was no detail or data given for why officials see investment declining, though companies reported during third-quarter earnings season that some of their investment plans have been curtailed due to the ongoing trade war between the US and China. Other tweaks in the statement could suggest less confidence in the need to raise rates three times next year, as officials projected in September.
Since December 2015, the central bank has approved eight quarter-point rate hikes, bringing the benchmark rate to around a 10-year high. Powell will speak after the December meeting and after every meeting next year, a first for a Fed chair and a sign of Powell's commitment to making the bank as transparent as possible.
"We think the Fed will still characterize the economy as "strong", despite moderation is business fixed investment spending", Michael Gapen, chief USA economist at Barclays, wrote in a note to clients.
But Fed policymakers also have begun debating whether the economy has reached a plateau as the stimulus from the Trump administration's $1.5 trillion tax cut package and increased federal spending begin to fade.
The quickened pace of economic growth - a 3.5 percent annual rate in the July-September quarter, after a 4.2 percent rate the previous quarter - has raised the risk that inflation could begin accelerating. As a result, the Fed could mention "tighter financial conditions" in the statement.
The Fed's decision Thursday was approved 9-0 by its voting policymakers.
The Fed's policy statement did not explicitly take stock of the recent volatility in United States equity markets that led to the selloff in October, or address the possibility of a slowdown in global growth next year.
"The question for the market is, is the Fed data-dependent or is it maintaining a rigid schedule for rate hikes in 2019?" said Quincy Krosby, chief market strategist for Prudential Financial in Newark, New Jersey.
That was well above the roughly 2% rate many economists and the Fed believe is the underlying trend. The central bank's policymakers have stressed, and most economists agree, that these small quarter-point increases amount to a gradual pace of credit tightening.
Trump is widely expected to keep criticizing the Fed for rising rates, but so far Powell has stayed on course and avoided firing back.
The central bank announced the range for its benchmark interest rate will remain fixed between 2 and 2.2 percent.