As expected, the Fed kept interest rates unchanged at between 0.25 and 0.50 percent once again.
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The central bank’s decision to stick with its 2016 rate path, however, appeared shakier, with six of its 17 policymakers projecting just one increase this year, Reuters reported.
Yellen said the us economy appeared to have gained momentum since April, but that the labor market had lost some steam.
Stocks have been under pressure this week amid fears that Great Britain next week will vote to leave the 28-nation European Union.
“It is a decision that could have consequences for economic and financial conditions in global financial markets”, she said.
The median projection of officials for the federal funds rate at year-end remained at 0.875 percent, implying two quarter-point increases in the committee’s four remaining meetings.
The Fed raised its target range for the federal funds rate to 0.25 percent to 0.5 percent in December a year ago, the first rate hike in almost a decade, marking the end of an era of extraordinary easing monetary policy.
With the Federal Reserve considered sure to leave interest rates alone when it ends a meeting Wednesday, Fed watchers will be seeking clues to the timing of future moves. Overall, it has become increasingly likely that the unswervingly cautious Fed will continue to postpone another rate hike until significantly later in the year, at best. However, it expects the inflation rate to rise to its goal of 2 percent as the labor market strengthens and the effect of previous declines in energy and import prices dissipates.
The FOMC did not offer a timeline for a rate hike, which means that a rate in July is also a possibility.
Fed Chair Janet Yellen is scheduled to hold a news conference at 2:30 p.m. EDT.
The Fed did not mention it in its statement, but Janet Yellen pointed it out in her press conference: “Brexit…is something we discussed and I think it’s fair to say that it was one of the factors that factored into today’s decisions”.
Chris Weston, market analyst at trading firm IG in Melbourne, said the Fed may wait until next year to make its next tightening move. Another thing possibly on their minds, though not mentioned in the statement, was the looming vote in the United Kingdom on separation from the EU. The US added just 38,000 new jobs, according to the Department of Labor. Inflation has been very low in recent years and its slow pace is a key reason holding back the Fed from raising rates further.
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During the recession, the Fed cut rates almost to zero, and raised them slightly to about half a percent late a year ago.
