The Federal Open Market Committee left the fed funds rate target at 0.25% to 0.50%, but seemed to offer a mixed picture about the economy that doesn’t give any clues about the next hike, according to its post-meeting statement, released Wednesday.
Most analysts expected the FOMC to leave rates unchanged, but sought clues from the statement regarding when the next rate hike may come. Markets don’t expect any increases until September.
While the statement said rate hikes will be “gradual,” it pointed to “slowed” economic growth.
“Growth in household spending has moderated, although households real income has risen at a solid rate and consumer sentiment remains high,” the statement noted.
The committee saw further improvement in housing, while business fixed investment and net exports “have been soft.” The statement said, “A range of recent indicators, including strong job gains, points to additional strengthening of the labor market.”
While inflation remains subdues, the panel, still sees inflation rising to 2% in the medium-term, as “earlier declines in energy prices and falling prices of non-energy imports” reverse.
For the third straight meeting, the statement did not comment on the balance of risks to the economy.
Once again, Federal Reserve Bank of Kansas City President Esther George was the only dissenter, preferring an immediate 25 basis point rate hike.
