As you likely know, the Federal Reserve's Federal Open Market Committee (FOMC) made the decision on September 17 to keep the federal fund target rate unchanged at 0-0.25%. Personally, I believe this was a fairly good idea, but that the FOMC should move more aggressively to stimulate the U.S. economy.
What are the Fed's goals? There are two explicit goals: (1) maximum employment and (2) price stability. What does the Fed think is happening? From the press release:
The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring developments abroad. Inflation is anticipated to remain near its recent low level in the near term but the Committee expects inflation to rise gradually toward 2 percent over the medium term.
I will get back to the view of the Fed and how my view is different later. First, I'll give you 4 reasons that the Fed made the right decision not to increase the Target Federal Funds Rate.