28 Jan 2015
FED remains patient despite low inflation and global turmoil
FXStreet (Córdoba) - As expected the Federal Reserve left interest rates unchanged at record low levels and reiterated that it will be patient “in beginning to normalize the stance on monetary policy”. The statement showed little changes and no surprises compared to December meeting.
According to the Fed the economic activity has been expanding at a “solid pace”, at the previous meeting it was characterized as “moderate pace”. Regarding inflation the FOMC expects inflation to decline further in the short term but they still expect it to rise toward the 2% target in the medium term. The decline in energy prices “have boosted household purchasing power”, the Fed noted.
“Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy”, the statement mentioned. Analysts note that “patient” means that the central bank is still on track toward a rate hike, probably as soon as June.
Unanimous
All the members of the FOMC voted in favor. In the previous meeting three members (Plosser, Kocherlakota -did not participated today- and Fischer) voted against the statement.
The minutes will be released February,18 while the next FOMC meeting will take place during on March 17/18 and it will be followed by a press conference by Janet Yellen.
According to the Fed the economic activity has been expanding at a “solid pace”, at the previous meeting it was characterized as “moderate pace”. Regarding inflation the FOMC expects inflation to decline further in the short term but they still expect it to rise toward the 2% target in the medium term. The decline in energy prices “have boosted household purchasing power”, the Fed noted.
“Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy”, the statement mentioned. Analysts note that “patient” means that the central bank is still on track toward a rate hike, probably as soon as June.
Unanimous
All the members of the FOMC voted in favor. In the previous meeting three members (Plosser, Kocherlakota -did not participated today- and Fischer) voted against the statement.
The minutes will be released February,18 while the next FOMC meeting will take place during on March 17/18 and it will be followed by a press conference by Janet Yellen.