Fed holds rates unchanged amid low inflation, financial tumult

Following the conclusion of a closely watched meeting, the Federal Reserve is keeping interest rates at record lows, citing a weak global economy, low inflation and instability in financial markets.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the FOMC said in a statement released at the conclusion of its latest two-day meeting.

In a press conference following the statement's release, Fed Chair Janet Yellen said "the situation abroad bears close watching," an acknowledgement of the recent flare up of volatility in global markets, such as in China.

There has been debate recently over how closely the Fed is watching foreign developments, particularly after Vice Chairman Stanley Fischer in August said, "the Fed's statutory objectives are defined in terms of economic goals for the economy of the United States, but I believe that by meeting those objectives, and so maintaining a stable and strong macroeconomic environment at home, we will be best serving the global economy as well."

Betsey Stevenson, a former Chief Economist at the Labor Department who is now at the University of Michigan, tweeted that she believes the Fed made the right call.