It was the biggest economic event of the month and nothing happened.
On Thursday, the Federal Reserve kept its benchmark interest rates pegged at 0%-0.25%, where they have been since December 2008.
The markets didn’t like it. In the US, both the Dow and S&P 500 closed in negative territory, Japan’s Nikkei was off almost 2% and markets in Europe are almost all red on Friday morning.
Here is what the analysts are saying about it.
'The timing of this first step is far less important than the path of rate rises. We expect the journey towards more normal interest rates to be gradual, with hikes coming only when justified by evidence of sustained economic growth. The reluctance of Fed officials to hike now can be linked to market conditions and their eagerness to avoid a premature move that risks stifling growth.'
Analyst: Jim Reid
'So the Fed stands pat and the spell of record low rates continues as concerns about developments abroad and the fragility of markets proved to be enough of a red flag for policymakers. The overall tone and message from both the statement and Fed Chair Yellen certainly felt like it was weighed more towards the dovish end of the scale.'
'There was some support from Yellen on the improvements in domestic activity with both business spending and the labour market in particular highlighted. She also kept the door open for a move this year, including October, but once again the timing was downplayed with the expected path of rate rises re-emphasised as the more important factor.'
Analyst: Anna Stupnytska
'The recent tightening in US financial conditions, driven by the strong US dollar and the August sell-off, if sustained, could indeed ultimately result in slower US growth. The state of the Chinese economy and vulnerabilities of other emerging markets add to the overall uncertainty at this point.'
'In this environment it came as no big surprise that the Fed decided to remain in the 'wait and see' mode for now. I believe a December hike is still likely at this point, provided data holds up, inflation and inflation expectations show some tentative signs of a reversal and financial conditions ease somewhat. But risks are skewed towards the hiking timeline shifting into 2016 altogether.'
Analysts: Ellen Zentner, Robert Rosener, Michel Dilmanian
'At the conclusion of its September 16-17 meeting the Committee took a pass on raising rates, as expected, and crafted a surprisingly dovish statement. The result was not the hawkish pass we had expected, nor was it the dovish pass our rates strategists saw as a risk, but somewhere perfectly balanced in between.'
'A 2015 rate hike remains in play as Chair Yellen underscored that most participants still see a rate hike this year as appropriate, but by no means is a 2015 hike a foregone conclusion.'
'The FOMC's acknowledgement that global economic and financial market developments are putting downward pressure on inflation should lead financial markets to focus on these more closely. A stable USD, slightly higher oil prices and further improvement in the labour market in coming months should combine to create conditions for a rate hike in December. We expect only two 25bp hikes in 2016 and two in 2017.'
Analyst: Lee Ferridge
'The consensus going into today's announcement was fairly split on whether rates would be raised. After reading the statement, it seems that concerns over China, late-summer volatility and stubbornly low inflation influenced their decision to keep rates unchanged. Additionally, the Fed's international focus has increased the importance of US dollar strength, with the dollar becoming the doorway by which the global economy affects the domestic one. Now it's a waiting game again and every upcoming meeting is on the table so long as data and conditions can justify a move. However, there is no guarantee that the conditions will be satisfactory ahead of the end of 2015.'
Analysts: Rajiv Setia, Michael Pond
'The Fed refrained from raising rates, citing the potential drag from global economic and financial developments and the move lower in inflation breakevens. The updated forecasts show a consensus at the Fed for hiking once before the end of the year, followed by a gradual hiking cycle.'
Analyst: Michelle Girard
'We have long highlighted the fact that if the Fed did not hike in September, we would assign highest odds for the first Fed move coming in March (the first meeting with a press conference in 2016). That is officially our new call. We put the odds of a Fed rate hike in October at 5%, the odds of a rate hike in December at 35% and the odds of a rate hike in March at 60%.'
'The September FOMC statement was definitely dovish, as we had expected. No rate hike, increased mention of factors negative on inflation, reference to financial turbulence and an increased reference to foreign developments all pointed the same way. Dipping the NAIRUestimate down and reducing the core inflation forecast in the next two years underlined this.'
Analyst: Jabaz Mathai
'The post FOMC rally in the rates curve is justified. We think that it is quite likely that the FOMC may not get an all clear signal for lift off in one month's time either on the external growth side or on the inflation side -- two factors that drove today's decision. Indeed liftoff may very well be pushed to 2016.'
Analysts: John E. Silvia, Sarah House
'Global developments were brought into the discussion. These developments bring in another element of uncertainty. We believe that a resolution of the global picture is unlikely to provide much guidance in the short run. While it may be said that a great majority of the FOMC expect a rate increase by the end of this year, this appears inconsistent with any reasonable expectation of a resolution of the global picture. Perhaps the global issue is just a temporary reason for no action.'
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