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Fed Leaves Key Interest Rate Unchanged, Citing Low Inflation

Dow soars over 250 points ahead of federal interest rate announcement. (Spencer Platt/Getty Images)
Dow soars over 250 points ahead of federal interest rate announcement. (Spencer Platt/Getty Images)

The Federal Reserve is keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets.

Wrapping up a closely watched meeting, Fed officials say that while the U.S. job market is solid, recent global developments may “restrain economic activity” and further drag down already low inflation.

Signs of a sharp slowdown in China have intensified fear among investors about the U.S. and global economy. And low oil prices and a high-priced dollar have kept inflation undesirably muted.

Before year’s end, many analysts still expect the Fed to raise its key short-term rate, which it’s kept near zero since 2008. A higher Fed rate would eventually send rates up on many consumer and business loans.

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