Fed Won't Raise Rates, Cuts 2015 GDP Forecast

The Federal Reserve has announced that it will keep interest rates near zero, saying that the current 0 to 0.25 percent target for the federal funds rate remains appropriate. This decision came as the Federal Open Market Committee slashed the GDP growth forecast for 2015 from 2.3-2.7 percent to 1.8-2.0 percent. The committee's inflation rate projections remained steady at 0.6-0.8 percent for this year and 2 percent in the long run. In a press release, the Fed claimed that it has seen moderate economic expansion in Q2 after a relatively stagnant first quarter. It cited job growth and decreased underutilization of labor resources as positive signs, but admitted that "business fixed investment and net exports stayed soft." The Fed maintained its stance that it would raise rates following continued economic improvement. It is, however, now expecting a "slightly slower" pace of interest rate hikes than it was previously anticipating. The SPDR S&P 500 ETF Trust SPY spiked up about $1 as the news hit around 1 p.m. ET, but shares recently traded nearly unchanged on the day at $210.30.