The United State’s Federal Reserve announced that rates would be unchanged in their January meeting and kept the patient language that was expected by the market. The central bank is ahead of other global counterparts as the U.S. economy continues to grow. Given the lack of inflation and the current state of the job market a rate hike is not needed in the short term, but the policy makers are living the option open to raise or delay if the economic conditions warrant it.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.
For the full statement visit the FOMC January page