The FOMC announced its decision to leave the benchmark bank rate unchanged at 0.25 percent and maintain its target interest rate at 0 to 0.25 percent. It is unlikely that the Federal Reserve will raise rates until at least 2014.
THE TAKEAWAY : [U.S. FOMC Maintains Benchmark Bank Rate at 0.25%, Unlikely to Rise Until 2014 ] > [USD Weakens Against AUD, EUR]
The Federal Open Market Committee announced its decision today to leave the benchmark bank rate unchanged at 0.25 percent and maintain its target interest rate at 0 to 0.25 percent. The last rate change occurred in December, dropping from 1.00 to 0.25 percent. It is unlikely that the Federal Reserve will raise rates until at least 2014, extending its time frame by at least a year and a half.
The U.S. economy has been expanding moderately despite some slowing in global growth. Household spending continues to increase, while growth in business fixed investment has slowed and the housing sector remains depressed. Although some indicators point to some improvement in the labor market conditions, the unemployment rate remains elevated. Inflation in recent months has been subdued, and longer-term inflation expectations remain stable. Over the coming quarters, the FOMC expects to see a modest rate of economic growth and anticipates that inflation will run at levels at or below those consistent with the Committee’s dual mandate.
The FOMC expects to maintain a highly accommodative stance for monetary policy in the medium term, stating that “economic conditions ” including low rates of resource utilization and a subdued outlook for inflation over the medium run ” are
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