The U.S. Federal Reserve said Wednesday that it plans to be "patient" when it comes to raising interest rates in the coming months.
The statement came after the Federal Reserve announced that it is leaving its benchmark interest rate unchanged in a range of 2.25% to 2.50%. In 2018, the Federal Reserve raised its key interest rate four times.
The Fed cited economic pressures and mild inflation as the reasons for leaving interest rates unchanged. The central bank also said that it is prepared to slow the reduction of its bond holdings if needed to help the U.S. economy in the months ahead.
Regarding future rate hikes, the Federal Reserve said that it plans to be "patient" and continue monitoring the health of the American and global economies. The Fed’s benchmark short-term interest rate influences many loan rates for businesses and consumers, including mortgages.
The Fed's new focus on patience is a reversal from a tone of urgency set at previous policy meetings. The central bank had previously left open the prospect of further interest rate increases – a message that caused fears in financial markets that the Fed might tighten credit aggressively this year.
Stock markets rallied on the latest decision to hold interest rates steady. The Dow Jones Industrial Average surged 200 points Wednesday after the Federal Reserve issued its policy statement and was up about 430 points an hour after the announcement.
In a media statement, the Federal Reserve said, "In light of global economic and financial developments and muted inflation pressures, the committee will be patient in determining what future adjustments" to the interest-rate policy will be appropriate.
