INTERNATIONAL - The US Federal Reserve left interest rates unchanged yesterday but signalled it still expected one more increase by the end of the year despite recent weak inflation readings.
New economic projections released after the Fed’s two-day policy meeting showed 11 of 16 officials see the “appropriate” level for the federal funds rate, the central bank’s benchmark interest rate, to be in a range between 1.25% and 1.5% by the end of this year.
That is one-quarter of a point above the current level. “The labour market has continued to strengthen economic activity has been rising moderately so far this year,” the Fed said in its policy statement.
It added that the near-term risks to the economic outlook remained “roughly balanced” but that inflation was being watched “closely”. The interest rate outlook for next year remained largely unchanged, with three hikes envisioned. But the US central bank slowed the pace of projected monetary tightening from there.