InvestmentsJul 30 2015

Fed waiting for ‘further improvement’

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Fed waiting for ‘further improvement’

The US Federal Open Market Committee (FOMC) voted to keep rates on hold in spite of acknowledging improvements in economic activity, the housing sector and the labour market.

In the statement released after the meeting, the FOMC said it expected economic activity to expand at a moderate pace, with “appropriate policy accomodation”. But it added that it “continues to see the risks to the outlook for economic activity and the labor market as nearly balanced”.

Combined with low levels of inflation the committee voted to keep the federal funds rate at its current 0-0.25 per cent target range.

It added: “In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 per cent inflation.

“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term.”