Fed keeps rates flat but hints 2 rises
Print Edition
THE US Federal Reserve has kept interest rates unchanged and signaled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.
The central bank’s decision to stick with its 2016 rate path, however, appeared shakier, with six of its 17 policy-makers projecting just one increase this year. Only one Fed policy-maker had done so when economic forecasts were last issued in March.
A sharp slowdown in US hiring in May had fueled doubts about the strength of the labor market going into the Fed’s two-day policy meeting. Fed Chair Janet Yellen acknowledged the need to see clear signs of economic strength before lifting rates.
“We do need to make sure that there’s sufficient momentum,” Yellen told a news conference on Wednesday.
The Fed also said the economy would grow only 2 percent this year and in 2017, 0.1 percentage points lower than previously forecast for each year.
It also cut its longer-term view of the appropriate federal funds rate, its benchmark lending rate, by a quarter point to 3 percent and indicated it would be less aggressive in raising rates after the end of this year.
Yellen was not clear on whether a rate increase could come at the next policy meeting in late July or whether the Fed would wait for a slew of firmer data as it headed into its September meeting.
“I’m not comfortable to say it’s in the next meeting or two, but it could be,” Yellen said. “It’s not impossible that by July, for example, we would see data that led us to believe that we are in a perfectly fine course.”
Yellen said the US economy appeared to have gained momentum since April, but that the labor market had lost some steam.
She acknowledged Britain’s possible exit from the European Union was one of the factors in the latest rate decision, saying the referendum next Thursday would have “consequences for economic and financial conditions in global financial markets.”
The rate decision was unanimous, with Kansas City Fed President Esther George, seen among the policy-makers most eager to raise rates, voting with her colleagues on the Federal Open Market Committee.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
