The Federal Reserve announced Wednesday that it will not be raising its benchmark interest rate and in fact appeared fixated on not raising rates for the remainder of the year.
The central bank will leave the benchmark rate, also known as the Fed Funds rates, between 2.25% to 2.5% as it cited a weakening in economic growth from 4th quarter 2018 and a slow down in household spending and business investment in the first quarter of fiscal year 2019.
Read Zero Hedge's break down of Wednesday's FOMC meeting.
Read the full FOMC press release on its decision here.
Watch Fed Chair Jerome Powell's press conference below:
The move to halt rate hikes for the second consecutive time comes as absolutely no surprise. With the fed raising rates throughout 2018, equity markets became rattled in December. Major indices were touching bear market territory and precious metals moved up quickly.
The U.S. economy is much to leverage up with debt. A rise in rates would crush many households. Not to mention the national debt of the federal government, which would cost much more to pay back with higher rates.
What this means is that the fed is backed up against a wall. If it raises rates it'll risk sending the markets in a panic, popping the same asset bubble both the central bank and the federal government use as a healthy economic indicator. If the stock market moves too far from its highs it'll force everyone to look at all the weak numbers that show the U.S. economy is not as healthy as chairman Powell says it is.
Will it get to the point where we drop rates much closer to 0% and open up the money floodgates for another round of QE? It is likely. The only thing the fed can do is ping pong back and forth with its interest rate tampering and print money. That is it ...
But you can't go into debt forever and you sure as hell can't print money forever.
This isn't going to end well.
