The Fed leaves rates unchanged, but will raise them by year-end – The Republic

MILAN – The Fed left unchanged the cost of borrowing. The rates are still between zero and 0.25%, the level at which they are since December 2008. Magazines downwards its growth forecast in the US economy for 2015 to 1.8% -2.0% from 2, 3 to 2.7% forecast in March. “The business economy is expanding moderately”, “it is accelerating” the rate of creation of jobs. The Federal Reserve believes that the US economy is growing at “a moderate” after a harsh winter, a step strong enough to withstand an increase in interest rates later this year. “The economy – reads the statement released by the Fed at the end of steering monetary policy – is growing moderately.” “The labor market is picking up, while the unemployment rate is stable.” Fifteen of the 17 members of the FOMC indicated that the first rate hike in nine years in this part will be decided later this year, although the Fed has lowered its estimates on the growth of US GDP in 2015. In 2016, however, the US economy will grow between + 2.4 to 2.7%, from + 2.3% -2.7% forecast three months ago. For 2017 the range of the expected US GDP has been retouched in improvement to + 2.1 to 2.5%, from + 2.0 to 2.4% estimated in March.

Despite a possible increase in rates policy Fed monetary “will remain accommodative for a certain period of time,” said the president of the US central bank, Janet Yellen, during the press conference following the two-day FOMC, noting that the increase in the cost of money will depend on data economic, in particular the performance of the labor market and inflation.

And the Fed has revised the forecasts on unemployment, which will be slightly higher than anticipated in March. This year the unemployment rate is expected to be between 5.2 and 5.3%, against the previous range between 5.0 and 5.2%, while for 2016 will be between 4.9 and 5 , 1% (equal to the previous estimate). As for inflation, the figure in 2015 should reach between 0.6 and 0.8%, unchanged from the range estimated in March. For the “core” component, that purged from the most volatile components as the prices of energy and food, the estimates are within the range 1.3 to 1.4%, the same as the previous estimate. The following year, the “Core” inflation is expected between 1.6 and 1.9%, against the fork between 1.5 and 1.9% estimated in March.

The Federal Reserve will begin to raise the cost of money when he sees “further progress in the labor market” and “will have sufficient confidence in the fact that inflation is moving towards the target of inflation,” said Yellen, explaining that “transitory factors have weighed on the economy.” The rates “may remain below normal levels” for an extended period.

Arguments:

Fed

US GDP

FOMC

Starring:

Janet Yellen