U.S. Federal Reserve on Wednesday left the benchmark interest rates unchanged and offered no hint on when it might move.

interest rates
interest rates
The central bank painted a relatively upbeat picture for the economy. “Labor market continued to strengthen and… economic activity has continued to expand at a moderate pace,” the central bank in a statement after concluding its two-day policy meeting.

It also acknowledged the improve consumer and business sentiment following the election of Donald Trump as the U.S. President.

The upbeat economic assessment suggested that the central bank should be on track to raise interest rates in the future. In last December, the Fed raised benchmark interest rates by 25 basis points, the first and only time in 2016.

However, the minutes of its December meeting showed that Fed officials were unsure about the pace of rate hikes this year due to uncertainty over the Trump administration’s fiscal and other economic policies.

Fed chair Janet Yellen said recently that fiscal policy was one of the factors which will affect the course of monetary policy over the next few years.

But she reiterated that it’s still too early to assess the impact from possible economic policy changes, because the size, timing and composition of such changes remain uncertain.

Yellen also emphasized that the central bank might continue move up interest rates gradually, because the economy seems unlikely to pick up markedly in the near term due to factors, such as weak foreign demand and slower labor market growth.

However, some Fed officials signaled that the central bank may accelerate interest rate hikes, if new fiscal policy mix introduced by the new Administration and Congress boosts inflation. Enditem

Source: Xinhua/NewsGhana.com.gh

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