Fed holds steady, rate-setters now see two hikes this year

(From Reuters)

The Federal Reserve held interest rates steady on Wednesday and indicated that moderate U.S. economic growth and “strong job gains” would allow it to tighten policy this year, with fresh projections showing policymakers expected two quarter-point hikes by the year’s end, half the number seen in December.

The U.S. central bank, however, noted that the United States continues to face risks from an uncertain global economy.

“A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months,” the Fed said in a policy statement in which it kept the target range for its overnight lending rate at 0.25 percent to 0.50 percent.

Yellen

Yellen

“However, global economic and financial developments continue to pose risks” and will keep inflation low for the remainder of 2016, it said.

In a press conference, Fed Chair Janet Yellen said it remained to be seen whether a recent firming in U.S. core inflation, which excludes volatile energy and food components, would be sustained. Read more



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