Update | Fed keeps interest rates flat, voices confidence in moderate US growth which keeps June rate increase in the cards
US interest rate moves impacts Hong Kong, especially key housing market; Wall Street ends higher after Fed announcement
The Federal Reserve kept US interest rates unchanged and expressed confidence in the economic outlook which may open the door for an interest rate increase in June.
In its statement, the Fed said it will “maintain the target range for the federal funds rate at ¼ to ½ per cent.”
“The stance of monetary policy remains accommodative, thereby supporting further improvement in labour market conditions and a return to 2 per cent inflation,” it said.
The policy-setting Federal Open Market Committee (FOMC) said the US labour market had improved despite the hiccup caused by a recent economic slowdown and it was keeping a close watch on inflation.
“Inflations is expected to remain low in the near term as the transitory effects of declines in energy and import prices dissipate and the labour market strengthens further,” the statement added.
“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.”
The US Central Bank raised rates for the first time in nearly a decade last December 2015, signalling the start of what it hopes to be the normalisation of US monetary policy.
