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Fed left interest rates unchanged

Wednesday, Dec 17 2014

As it was largely expected Committee 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% inflation. Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. However, it is expected that the benchmark rate will be 1.125% at the end of next year, compared with a 1.375% median estimate in September.

The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is expected to rise gradually toward 2% as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.

 

There is a lot volatility currently at the markets with major USD rivals going up and down. Euro is currently being traded few points above 1.2420 level, Sterling is around 1.5650 area, while Aussie is slightly below 0.8190 level. More volatility can be expected with the FOMC Press Conference at 2:30 CET.

Last modified on Wednesday, 17 December 2014
More in this category: « US CPI declined by 0.3% in November Ifo Business Climate Index rose to 105.5 points »

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