officials of the Federal Reserve took off from higher borrowing costs and lowered forecasts for height interest rates will rise this year, citing the potential impact of weaker global growth and financial market turmoil on the US economy.
The Federal Open Market Committee maintained the target range for the rate benchmark federal funds at 0.25 percent to 0.5 percent, the central bank said in a statement on Wednesday following a meeting two days in Washington. The median quarterly projections updated policymakers saw the 0.875 percent rate at the end of 2016, which implies two quarter point increases this year, down four forecasts in December.
"The committee is expected that with gradual adjustments in the stance of monetary policy, the economy will grow at a moderate pace and indicators of the labor market will continue to strengthen," he FOMC said. "However, the global economic and financial developments continue to pose risks."
Kansas City Fed President Esther George dissented from the decision, preferring an increase in quarter-point rate.
Fed President Janet Yellen is scheduled to hold a press conference at 14:30 in Washington to explain the committee's decision.
Pace
lower forecasts that Slower global growth has clouded the US outlook and led investors to expect a rate slower tightening since the Fed raised rates in December for the first time in nearly a decade. Yellen said in February that the market turmoil had "significantly" tightened financial conditions by lowering the price of the shares, causing the dollar to strengthen and stimulate some borrowing costs.
"Economic activity grew at a moderate pace," with household expenditure winner amid the company's investment "soft" and net exports, the Fed said. While the inflation has "picked up in recent months, the" inflation compensation measures based on the market are still low, the central bank.
The median projections of Fed officials, known as "dot plot," saw the federal funds rate to 1.875 percent at the end of 2017, compared with 2,375 forecast percent in December. The level of the end of 2018 fell to 3 percent from 3.25 percent, with the long-term projection of 3.25 percent, down 3.5 percent.
Policy makers maintained their projections on how long inflation will return to the Fed's 2 percent target, while reducing their inflation forecast to 1.2 percent this year, from 1.6 percent. Officials still see the preferred price gauge rose 1.9 percent in 2017 and 2 percent in 2018.
officials maintained their forecast an unemployment rate of the United States of 4.7 percent in the fourth quarter of this year. The median projection for 2017 fell to 4.6 percent from 4.7 percent, and in 2018 to 4.5 percent from 4.7 percent. The rate was 4.9 percent in February.
labor market
"A number of recent indicators, including strong job gains, says the further strengthening of the labor market, "said the FOMC.
Fed reiterated that the" position of monetary policy remains accommodative, thereby supporting a further improvement of the conditions of the labor market and a return to 2 percent inflation. "
economists in a Bloomberg survey conducted earlier this month put the probability of a rate hike in April to 15 percent and the chance of a move in June to 42 percent. This compares with projections of 25 percent in April and 54 percent for June implicit market, according to prices on the futures fed funds Tuesday.
Fed officials publicly deferred have on the economic outlook , with Governor Lael Brainard on March 7 calling for patience in tightening monetary policy while the vice president Stanley Fischer, the day highlighted the "first signs" of inflation.
Yellen and colleagues distinguished uncertainty about China's prospects as a risk to US growth.
the domestic economy of the United States was mostly solid, however. gains payroll reached averaged 235,000 over the past six months, the unemployment rate is the objective of the Fed for many jobs, although long-term unemployment measures and wage growth suggest the labor market is still room to develop.
inflation mandate
progress has also been made on the side of inflation of the dual mandate of the Fed. The personal consumption expenditure index price, the objectives of the Fed to annual gains of 2 percent, rose 1.3 percent in January from a year earlier, after 13 consecutive months with increases less than 1 percent, due to lower energy prices.
price index in separate published Wednesday showed consumer prices, excluding food and energy, rose more than expected 0.3 percent in February from the previous month.
Oil prices have jumped about 40 percent since mid-February, when the cost of a barrel of oil fell to around $ 26, the lowest since 03.
US stock markets, which had slumped more than 10 percent in mid-February from the beginning of the year, also gained ground, with 500 index Standard and Poor now down only 1 4 percent this year to Tuesday. Meanwhile, the dollar, whose strength in 2015 US exports and growth dented wounded, slipped about 1.3 percent against a broad basket of currencies since December 31.
international Easing
the tendency Fed tightening contrasts with the aggressive easing abroad.
The European Central Bank triggered an unprecedented new round of stimulus last week that included a cut in a key interest rate still below zero.
Tokyo, the Bank of Japan held fire on a new stimulus package Tuesday, but laid the foundation for further easing after cutting its deposit rate to minus 0.1 percent in January.
China's central bank cut the key interest rate to a record six successive reductions to October, and recently made a further reduction of the reserve requirement ratio for large banks.
Bloomberg
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