Fed leaves in­ter­est rates un­changed

China Daily (Canada) - - FRONT PAGE - By AGEN­CIES

The Fed­eral Re­serve held in­ter­est rates steady on Wed­nes­day in its first meet­ing since Pres­i­dent Don­ald Trump took of­fice, but painted a rel­a­tively up­beat pic­ture of the US econ­omy that sug­gested it was on track to tighten mone­tary pol­icy this year.

The US cen­tral bank said job gains re­mained solid, in­fla­tion had in­creased and eco­nomic con­fi­dence was ris­ing, al­though it gave no firm sig­nal on the tim­ing of its next rate move.

Fed pol­i­cy­mak­ers are still await­ing clar­ity on the pos­si­ble im­pact of Trump’s eco­nomic poli­cies.

“Mea­sures of con­sumer and busi­ness sen­ti­ment have im­proved of late,” the Fed said in a unan­i­mous state­ment fol­low­ing a two-day pol­icy meet­ing in which it left its bench­mark in­ter­est rate in a range of 0.50 per­cent to 0.75 per­cent.

The Fed also high­lighted that the un­em­ploy­ment rate, cur­rently at 4.7 per­cent, was still hov­er­ing near its re­cent low.

Fi­nan­cial mar­kets were lit­tle changed after the rate de­ci­sion, while in­vestors were still ex­pect­ing the next rate in­crease to oc­cur in June, ac­cord­ing to Fed funds fu­tures data com­piled by the CME Group.

The Fed raised rates in De­cem­ber for only the sec­ond time in a decade and fore­cast three rate in­creases in 2017.

Fed Chair Janet Yellen re­cently un­der­scored that, with the econ­omy near full employment, the cen­tral bank risked a “nasty sur­prise” on in­fla­tion if it is too slow with rate hikes.

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