MORE DATA. US monetary officials discounted the need to start cutting the Federal Reserve’s key rates unless “they had gained greater confidence” that inflation will sustain its decline towards the 2 percent target, minutes of the two-day Federal Open Market Committee meeting that ended last March 20 and released on Wednesday showed. During the meeting, the Fed decided to keep the federal funds rate between 5.25 percent - 5.5 percent. (Photo by Anadolu)
ISTANBUL – The US Federal Reserve wants to see more "confidence" that inflation is moving closer to its 2 percent target before cutting interest rates, minutes of the recent Federal Open Market Committee (FOMC) meeting showed.
"Participants noted indicators pointing to strong economic momentum and disappointing readings on inflation in recent months and commented that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent," minutes of the two-day meeting that concluded last March 20 and released on Wednesday showed.
The Fed kept its federal funds rate unchanged between 5.25 percent - 5.5 percent last March as widely expected.
Annual consumer inflation in the US, however, rose to 3.5 percent in March, and was up monthly by 0.4 percent, both coming in above expectations, according to figures released by the Bureau of Labor Statistics on Wednesday.
"(FOMC) Members agreed that they did not expect that it would be appropriate to reduce the target range until they have gained greater confidence that inflation is moving sustainably toward 2 percent," said the minutes.
The Fed's next two-day meeting will conclude May 1 and it is widely expected to keep the federal funds rate unchanged.
The probability of a rate cut of 25 basis points at the Fed’s June 12 meeting stood at just 16.5 percent as of Wednesday, according to the FedWatch Tool provided by the US-based Chicago Mercantile Exchange Group.
The probability of a cut of 25 basis points at the July meeting was 35.7 percent and 45.5 percent for the September meeting. (Anadolu)
