WASHINGTON _ After three successive interest rate cuts, the Federal Reserve hit the pause button at its last meeting of the year on Wednesday and signaled it was likely to remain on the sidelines all next year.
The decision to keep the Fed's benchmark rate at between 1.5% and 1.75% was approved unanimously by all 10 voting members, whereas one or two had dissented in recent prior meetings.
On rates, 13 of 17 policymakers expect the Fed's key interest rate to remain unchanged through all of next year. None see further cuts, while four officials are projecting a single quarter-point rate hike in 2020.
In making the widely expected decision, the central bank has kicked the can down the road _ into a potential minefield during the 2020 presidential election year.
While the U.S. economy remains defiantly buoyant today, there are signs that next year could be different. Among them: the sagging European economy with Britain's uncertain exit, President Trump's festering trade war with China and others, and an alarming surge in borrowing by major U.S. companies.
Also, the current good times, which began with recovery from the Great Recession in 2009, are long in the tooth. For almost all economists, the only questions about a slowdown is when it will come and how severe it will be.
And the Fed will be in a difficult position to deal with problems next year. For one thing, it has set the bar very high for raising the present, historically low level of interest rates.
For another, action next year will occur in a supercharged political atmosphere. Trump has already attacked the Fed again and again for not pumping up the economy, the health of which is critical to his reelection prospects.
Former Fed Chairman Alan Greenspan famously observed that the job of the central bank during good times is to take away the punch bowl just as the party really gets going.
That's never an easy or popular decision _ all the more so in a year when both political parties will be quick to jump on any decision that seems to help one side or the other.
Trump has been haranguing Fed Chairman Jerome H. Powell all year long, pressuring him to lower interest rates and keep the good times rolling for next year's election.
The political heat will only increase as U.S. economic growth is expected to slow if Trump escalates his trade war with China.
Powell, whose credibility already has taken a hit for making a sharp pivot from hiking rates last year to cutting them amid Trump's attacks, has insisted that the Fed would operate independently and free from political influence.
In the coming months, he may well need to show the kind of iron will and courage displayed by the legendary Fed Chairman Paul Volcker, who died Sunday _ to take away the punch bowl should inflation rear its head or further lubricate the economy if it stumbles, no matter the political price.
In addition to its main policy statement, Fed officials Wednesday released updated economic projections.
Fed policymakers are looking for U.S. economic growth to slow next year to 2%, down from 2.2% this year. The economy expanded by almost 3% in 2018, fueled by the Republican tax cuts.
The jobless rate is expected to stay next year at the current half-century low of 3.5%, and inflation is projected to rise to 1.9%, close to the Fed's 2% target, from 1.5% this year.
Despite the growth slowdown and trade uncertainties, which have hampered business investments, the labor market has outperformed expectations. Employers have added more than 200,000 jobs on average in the last three months, and that's helped boost consumer confidence and spending, the key engine of the American economy.
