The federal funds rate target was left unchanged at 0.25% to 0.50% by the Federal Open Market Committee, according to its statement released Wednesday, which hinted at coming rate hikes by saying risks to the short-term outlook have "diminished."
The FOMC statement pointed to a stronger labor market and moderate economic expansion, with strong growth in household spending. The negatives include business fixed investment.
"Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports," the statement said. "Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months."
Near-term inflation will be low, but in the medium term it will grow to 2%.
"Near-term risks to the economic outlook have diminished," the statement noted.
Federal Reserve Bank of Kansas City President Esther L. George was the lone dissenter in the 9-1 vote, as she wanted a 25 basis point rate hike.
