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No Interest Rate Hike From The Fed .. This Month, Anyway

NO INTEREST RATE HIKE

The U.S. Federal Reserve's seven-year-long streak of near-zero interest rates will continue — at least this month.

The Fed cited low interest rates and global economic instability as the principal reasons for delaying an interest-rate liftoff.

It was the most closely-watched decision by the Fed in years. A hike would have been the first increase in the U.S.'s prime lending rate since 2006. U.S. interest rates affect rates for mortgages and other kinds of debt in Canada.

A poll from the Wall Street Journal in advance of the decision found 54 per cent of experts expected the Fed to hold rates, while 46 per cent expected a hike.

The issue of whether or not the Federal Reserve should start raising rates has been the subject of a lot of debate in recent weeks. Some analysts have warned that raising rates now could set off a global debt crisis, due to the enormous amount of debt the world has taken on since the last financial crisis.

Others warn that leaving rates this low for this long is distorting the economy because rates of return are too low to spur investment, and the economy will sputter in the long run without rate hikes.

Analysts largely continue to expect the Fed to hike rates before the end of the year, but few expect more than one hike this year.

More to come.

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