In its statement this evening the Federal Reserve left interest rates unchanged and gave no clear indication of when they will rise.
Analysts were listening out for a possible hike before the next meeting of the Federal Open Market Committee (FOMC) in September, but the central bank did not confirm this and said inflation “continued to run below the committee's longer-run objective”.
It said this was partly the result of earlier declines in energy prices and prices of non-energy imports. On a more positive note it recognised the unemployment reduction and job creation that has taken place in the US recently. “Economic activity has been expanding moderately in recent months,” the statement said.
All members of the committee agreed not to raise rates over the coming months. The statement said that while inflation is expected to remain near its current level in the near term, it will gradually rise towards the two per cent target in the medium term.
Interest rates have been left at the near zero level they have been at since 2008. The news will come as a surprise to some analysts, who expected the statement to reveal some intention to raise rates three months from now.
Between now and September, a number of economic data sets are due to be released that will shed more light on the state of the US economy, including further job reports, wage data and inflation estimates.