U.S. Federal Reserve keeps key rate unchanged

Martin Crutsinger, The Associated Press</span>
Published Wednesday, August 1, 2018 2:11PM EDT

WASHINGTON -- The Federal Reserve is leaving its benchmark interest rate unchanged while signalling further gradual rate hikes in the months ahead as long as the economy stays healthy.

The Fed's decision left the central bank's key short-term rate at 1.75 per cent to 2 per cent -- the level hit in June when the Fed boosted the rate for a second time this year.

The Fed projected in June four rate hikes this year, up from three in 2017. Private economists expect the next hike to occur at the September meeting.

In a brief policy statement, the Fed notes a strengthening labour market, economic activity growing at "a strong rate," and inflation that's reached the central bank's target of 2 per cent annual gains. Officials see economic risks as roughly balanced.

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