Federal Reserve officials left interest rates unchanged, acknowledging inflation is close to target without indicating any intention to veer from their gradual path of interest-rate increases.
“Inflation on a 12-month basis is expected to run near the committee’s symmetric 2% objective over the medium term,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington. “The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate.”
Officials may have signaled their willingness to allow inflation to exceed their 2% goal somewhat by adding a reference to the “symmetric” nature of their target.
The FOMC also noted the weakness in growth in the first quarter, removing a reference in the in March statement that the economic outlook had “strengthened in recent months.” They balanced that out by noting strong growth in business investment.
U.S. economic growth cooled in the first quarter to an annualized pace of 2.3% after averaging higher than 3% in the previous three quarters.
The decision to maintain the federal funds target range at 1.5% to 1.75% was a unanimous 8-0. This FOMC meeting won’t be followed by a press conference.