No change to US interest rates

(iStock)
(iStock)

The US Federal Reserve is keeping interest rates on hold.

The Fed announced at 6am Thursday morning (NZT) it was holding its key rate at between 0.25 and 0.50 percent.

Its official forecast shows two the likelihood of two interest rate increases this year.

But the Fed's "dot plot", which contains the forecasts of Fed officials, shows that six members now believe there will only be one rate hike this year.

This prompted a slight weakening in the US dollar.

The New Zealand dollar spiked after the announcement, rising from 70.20 US cents to around 70.6 US cents. But the kiwi then eased to 70.39 US cents by 7am.

Wall Street posted its fifth negative trading day in a row.

The Dow Jones Industrial Average slipped 0.20 percent, or 35 points to 17650.

The broader S&P500 and the tech heavy Nasdaq both slipped 0.18 percent.

Thirty year mortgage rates are sitting at 3.39 percent and 15 year mortgages are sitting at 2.62 percent in the United States.

Saving rates are typically between half a percent and just over one percent.

The Fed raised rates last December for the first time since the global financial crisis.

It had planned as many as four interest hikes this year, but uncertainty on global markets has seen the Fed scale back those plans.

In a statement the Fed said it expected the US jobs market to improve after recent weakness.

But it has lowered its forecast for economic growth this year and in 2017.

It is forecasting annual GDP growth of only 2 per cent for the foreseeable future. That is slightly lower than forecast at the March policy meeting.

The Federal Reserve's policymakers are worried about potential weakness in the US labour market and the possibility of financial turmoil if Britain votes next week to leave the European Union.

Newshub.

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