Fed opts to stay course, keeps benchmark interest rate unchanged

The U.S. Federal Reserve has decided to keep its benchmark interest rate unchanged in a range between 0.25 and 0.5 per cent.

The bank opted to hike its benchmark rate in late 2015, the first time it had moved its rate in almost a decade from record lows set during the Great Recession.

That was a sign that America's central bank thought the economy was getting ready to stand on its own without additional monetary stimulus.

Since then, stock markets have been extremely volatile, and the global economy is showing signs of a slowdown, which caused a minority of economists who watch the Fed to predict the bank might reverse course and put its rate back to effectively zero.

The Fed didn't do that, however, saying in a statement, "The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.

"However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."

That's the central bank's way of saying it still thinks the world's largest economy is getting fundamentally stronger, and over time is ready to withstand interest rates that are closer to historical averages, in the mid-single digits.

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