Fed keeps interest rates near zero, but hints of increase by mid-December

The Federal Reserve kept interest rates near zero, but said that it considers increasing it after their final meeting mid-December.

The New York Times reported that the Fed's announcement last Wednesday is a bid to make investors understand that it could increase its benchmark interest rate before the end of the year. After a two-day meeting, Fed officials are still figuring out whether the economy can handle higher interest rates, as there are no concrete sign of an upward curve for growth.

Capital Economics chief United States economist Paul Ashworth said, "Everything will come down to the incoming data between now and mid-December."

According to The Wall Street Journal, top Fed officials has been suggesting that the economy is almost strong enough for a benchmark short-term rate increase, but there haven't been any concrete move to raise it. In September, when most were expecting a rate increase, the Fed stayed put, pointing to turbulent global markets and weak growth overseas, especially in China, as major reasons.

WMUR reported that State Street Global Advisors chief investment strategist Michael Arone said that the Fed is "keeping its options open." But chances for a rate hike before the year ends is slowly becoming less possible as recent data show wobbly economic growth. Inflation is still flat, jobs report for September is not attractive, and the strong US dollar seem to be hurting the manufacturing industry.

According to D.A. Davidson fixed income strategist, Sharon Stark, the economy's condition has been declining since the Federal Reserve officials last met, and it seems that they wont raise rates until March 2016.

A Fed rate hike is central banks' way of indicating that the economy is almost in its full health. If a rate hike pushes through, it would be the first that it had increased since 2006. This means the economy has significantly been moving forward since the Great Recession. The Fed puts interest rates to zero during these times to stimulate the economy.