US Federal Reserve holds interest rates steady

ANKARA (AA) - The U.S. central bank has decided to hold interest rates steady, the Federal Open Market Committee (FOMC) announced Wednesday.

After the conclusion of its two-day meeting, the FOMC voted unanimously to maintain its interest rates at 1.00 -1.25 percent.

"Job gains have remained solid in recent months, and the unemployment rate has stayed low," the FOMC said in a statement.

The unemployment rate fell to 4.3 percent in July, its lowest level in 16 years, but inflation remains below the Federal Reserve's target of 2 percent.

The Consumer Price Index, a major measure of consumer inflation in the U.S. economy, rose 0.4 percent in August, or 1.9 percent year-on-year, according to the Labor Department.

The FOMC, however, said it expects inflation to reach 2 percent in the medium-term.

Despite the economic effects of hurricanes Harvey and Irma, the Fed said the economy would not be adversely affected in the long-run.

"Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term," the FOMC said.

As gasoline prices increased following the hurricanes, inflation could rise, but only temporarily, the Fed noted.

The FOMC has two meetings left this year, and analysts do not expect a rate hike in November but believe the Fed may increase rates the following month.