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US Fed: No interest rate hike, for now
June 15, 2016, 6:48 pm

A mixed bag of economic data coupled with poor Wall Street performance has delayed interest rate hikes this summer [Xinhua]

A mixed bag of economic data coupled with poor Wall Street performance has delayed interest rate hikes this summer [Xinhua]


Although it stated that it expects the job market to rebound in 2016 and that US economic performance has strengthened in recent years, the Federal Open Market Committee (FOMC) indicated following its two-day meeting in Washington that it will not hike interest rates at this time.

Instead, it voiced confidence that interest rates will likely gradually rise but maintained an accommodative stance.

The decision does not come as a surprise following recent data showing a subdued US economy late last and early this year.

At a press conference shortly after the FOMC statements were made public, Fed chief Janet Yellen admitted that recent economic data had been a mixed bag “suggesting our cautious approach to adjusting monetary policy remains appropriate”.

Last week, she called on markets not to be pessimistic about the health of the US economy, particularly after the Labor Department’s lower-than-expected May job reports.

On Wednesday, she again reiterated that position.

Although she acknowledged that the pace of improvement in the jobs market was slower than had been hoped, she did warn markets not to be thrown into a frenzy.

“It’s important not to over-react to one or two monthly readings. The committee continues to expect the labor market will strengthen further,” she added.

She also said that the FOMC expects to gradually increase interest rates over time in tandem with the Fed’s objectives of maximum employment and price stability.

The BRICS Post with inputs from Agencies

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