29 Apr 2015
FOMC acknowledges slowing economy but keeps rate options open
FXStreet (Córdoba) - The Fed acknowledged that the US economy slowed over the winter months but left the door open to an interest rate increase, as the central bank pointed to transitory factors, according to the FOMC statement.
“Although growth in output and employment slowed during the first quarter, the Committee continues to expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate”, the statement reads.
The Federal Reserve decided to keep the rate for federal funds at 0-0.25% and reaffirmed its stance that it will continue to monitor its objectives of maximum employment at 2.0% inflation to determine the timing of the lift-off.
“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term”.
The Federal Reserve also reiterated it will take a balanced approach when it decides to remove policy accommodation.
Next FOMC meeting will take place on June 16-17. Despite the Fed didn’t rule out a June hike, many analysts think it will wait at least until September.
“Although growth in output and employment slowed during the first quarter, the Committee continues to expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate”, the statement reads.
The Federal Reserve decided to keep the rate for federal funds at 0-0.25% and reaffirmed its stance that it will continue to monitor its objectives of maximum employment at 2.0% inflation to determine the timing of the lift-off.
“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term”.
The Federal Reserve also reiterated it will take a balanced approach when it decides to remove policy accommodation.
Next FOMC meeting will take place on June 16-17. Despite the Fed didn’t rule out a June hike, many analysts think it will wait at least until September.