Fed holds interest unchanged as hints to raise it once in 2019

The Federal Reserve today kept the interest rate in the range between 2.25% and 2.5% unchanged, consistent with expectations, but hinted at the same time to raise it once this year and never raise it at all during 2020.

The federal bank stated it would reduce its holdings of bonds and mortgage-backed securities by September.

Before the adoption of the patience policy in January, the Federal Reserve was eager to raise interest rates twice this year and again in 2020, but declined that to back down as the US economy slowed and inflation continued.

The central bank lowered its GDP growth forecast for 2019 to 2.1% from its previous forecast of 2.3%.

The reserve also lowered its forecast for the personal consumption expenditure index - which is based on inflation - to 1.8% from its previous forecast of 1.9%, so that inflation remains at its core value of 2% , which is the target of the central bank.

The bank still expects to raise the interest rate to 2.8% in the long term - not before 2021 - and announced plans to start reducing its holdings of bonds and securities with a total value of about $4 trillion from May to end in September.