he Federal Reserve concluded their FOMC meeting on Wednesday of last week, coming to the conclusion that they will not increase their interest rate in the month of October. However, the report from the meeting did mention that a December rate hike was still a possibility. As a result, we saw quite the reaction in the market and will likely continue to see a strong reaction until the December FOMC meeting. Today we’ll talk about why the Federal Reserve decided against increasing its interest rate, how the market reacted to the news, what we can expect to see moving forward and how binary options traders can take advantage of the trends.

Why The Federal Reserve Kept Their Interest Rate The Same

The Federal Reserve has had mixed emotions about the state of the US economy and its ability to hold strong through an interest rate hike. However, it’s clear so far that the Fed is too concerned with the state of the economy to increase rates as of yet. You see, if the Fed did make the decision to increase its interest rate, consumers and businesses alike would find themselves paying more money in interest and having less money to spend elsewhere. Unfortunately, the economy simply can’t handle the pressure. While the Fed avoided talking much about the global economy, they did bring up primary areas of concern with regard to the US economy.

Although there are currently several issues with the United States economy, the Federal Reserve seemed to focus on two of the bigger problems. First and foremost, the United States seems to be having a problem adding new jobs to the economy. For the nation to show strong economic growth, economists expect to see 200,000 or more jobs added to the economy on a monthly basis. While that proved to be the case earlier in the year, jobs have fallen flat as of late. In both August and September, the US jobs report showed a miss by wide margins!

The other problem that the Federal Reserve focused on was the US GDP. Throughout the year, consumers have been spending less than anyone would have liked to see. To make matters worse, a strong dollar brought exports down and new home sales have been declining as well. All in all, this spells trouble for the overall US GDP for the year.