The fed raise the federal funds rate

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Please read over the release and tables and answer the following questions-

1. Why didn't the Fed raise the Federal Funds rate at this session? Instead they left the target rate at 0-.25% as the committee said: "...the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate."

2. What were the immediate consequences of this decision on the financial markets on Thursday and Friday? Was this anticipated to be the reaction? If the Fed was convinced that the economy was developing moderately, why not raise rates and why should the markets have reacted so negatively?

Reference no: EM13841645

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