Following its two-day policy meeting, the Federal Reserve has confirmed it is keeping its target interest rate at close to zero per cent, but says it will raise it soon if the US economy continues to grow.
Since the 2008 financial crisis, the US central bank has kept its rates at a record low in an attempt to boost the economy. It has made clear, however, that this will not continue for much longer.
"Although growth in output and employment slowed during the first quarter, the Committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace,” it said in a statement today, referring to the poor US economic growth data released earlier in the day.
The US Commerce Departments revealed on Wednesday that first-quarter growth in the US had slowed to 0.2 per cent annually, which was below expectations.
No reference was given to the timing of a rise, however, to which markets initially reacted badly and then recovered again slightly.
Marc Chandler, head of global currency strategy at Brown, Brothers, Harriman and Company, wrote in a client note: "There is nothing really new in the Fed statement. It formally recognizes that growth has slowed, but nothing beyond what various officials have already acknowledged."