The US Federal Open Market Committee (FOMC) acknowledged that economic growth slowed during the winter months, “in part reflecting transitory factors”.
In its latest statement, the FOMC pointed to moderation in the pace of job gains and a “steady” unemployment rate since it met in March, with a range of labour market indicators that suggested underutilisation of labour resources was “little changed”.
The statement followed figures from the US Bureau of Economic Analysis which revealed that the US economy grew just 0.2 per cent in the first quarter of 2015, down from 2.2 per cent growth seen in the final quarter of 2014.
Earlier in the year, it had been predicted that the US Federal Reserve may move to raise rates in June this year on the back of strong data, but many analysts have since adjusted that to a September rate hike.
The Committee confirmed inflation continued to run below its longer term objective, reflecting “declines in energy prices and decreasing prices of non-energy imports”.
It said: “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 labour market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term.”