The US Federal Reserve remains on track to raise interest rates later this year.
The Fed said economic growth continued to meet its expectations and it indicated that officials did not need to see much more progress before raising rates, according to a statement issued on Wednesday after a two-day meeting of its policymaking committee.
The statement said officials wanted to see “some further improvement in the labor market,” suggesting the finish line is closer than at the Fed’s last meeting last month, when the central bank said it sought “further improvement.”
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The decision to keep rates near zero for at least a few more weeks was unanimous, supported by all 10 voting members of the Federal Open Market Committee, but a number of those officials have said that they do not intend to wait much longer.
The Fed’s tone on Wednesday was upbeat. While growth remains disappointing by historical standards, the Fed said the economy continued to expand at a “moderate” pace, which was driving “solid job gains and declining unemployment.”
The statement also was notable for the absence of bad news. There was no mention of global problems, as the European debt crisis has returned to a low boil, and the Fed once again expressed confidence that inflation would climb back toward the Fed’s target pace of 2 percent a year.
The Fed has kept its benchmark interest rate near zero since December 2008. Fed officials have said repeatedly that they plan to start raising rates this year as long as the economy keeps chugging along.
Surveys of economic forecasters show that most expect the Fed to start raising interest rates at its next meeting in mid-September. However, measures of market expectations point to a December liftoff.
Inflation remains sluggish. Prices rose just 0.2 percent over the 12 months ending in May, according to the Fed’s preferred measure, a US Department of Commerce index of personal consumption expenditures. It was the 37th consecutive month that inflation has remained below the Fed’s declared target of 2 percent annual growth.
The economy’s state may become clearer before the Fed’s next meeting on Sept. 16 and Sept. 17. Fed officials will be able to review an initial government estimate of second-quarter GDP, due out this week, and a pair of monthly labor market reports, among other data.
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