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A television monitor on the floor of the New York Stock Exchange shows the decision of the Federal Reserve, Wednesday, Nov. 2, 2016. (Richard Drew/AP)
A television monitor on the floor of the New York Stock Exchange shows the decision of the Federal Reserve, Wednesday, Nov. 2, 2016. (Richard Drew/AP)

The unspoken factor in Fed's hold on rates: Donald Trump Add to ...

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Central banks don’t like to talk politics, so it’s no surprise that the U.S. Federal Reserve’s stand-pat interest rate decision Wednesday made no mention of the U.S. presidential election. But the shadow of Donald Trump is all over the Fed’s wait-and-see stance on a rate hike.

The Fed’s policy-setting federal open-market committee (FOMC) held the benchmark federal funds rate steady in the 0.25-to-0.5-per-cent range, despite evidence of a steadily improving U.S. economy that the financial markets still expect will trigger a quarter-percentage-point rate hike at the FOMC’s next meeting in December. Indeed, the FOMC’s statement acknowledged that “the case for an increase in the federal funds rate has continued to strengthen” – suggesting it has inched closer to that much-anticipated increase.

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