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The U.S. Federal Reserve opened the way for a possible rate hike by removing a key indicator of its intention to keep the near-zero rates from a forward guidance statement Wednesday, but cautioned against expecting an early hike.
The Fed said in a statement after a Federal Open Market Committee (FOMC) meeting that the committee reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate in order to support continued progress toward maximum employment and price stability.
But the statement, unlike the previous one, didn't say the committee "can be patient" in raising the key rate. The "patient" expression has been considered a key indicator of the Fed's intention to keep the benchmark interest rates at record lows.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the statement said.
"This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range," it added.
The statement also said a rate hike "remains unlikely at the April FOMC meeting."
Views vary as to the timing of a rate hike.
Some believe it could come as early as in June while others say it could be delayed until after September to further spur growth.
In Wednesday's statement, the Fed gave a little gloomier outlook for the economy than in the previous statement, saying "economic growth has moderated somewhat." (Yonhap)
The Fed said in a statement after a Federal Open Market Committee (FOMC) meeting that the committee reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate in order to support continued progress toward maximum employment and price stability.
But the statement, unlike the previous one, didn't say the committee "can be patient" in raising the key rate. The "patient" expression has been considered a key indicator of the Fed's intention to keep the benchmark interest rates at record lows.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the statement said.
"This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range," it added.
The statement also said a rate hike "remains unlikely at the April FOMC meeting."
Views vary as to the timing of a rate hike.
Some believe it could come as early as in June while others say it could be delayed until after September to further spur growth.
In Wednesday's statement, the Fed gave a little gloomier outlook for the economy than in the previous statement, saying "economic growth has moderated somewhat." (Yonhap)
