US Federal Reserve Raises Interest Rate

Washington, MINA – The US Federal Reserve decided Wednesday to raise the target range for the federal funds rate to 1.5 to 1.75, KUNA reported.

The Federal Reserve said in a statement that information received since the Federal Open Market Committee (FOMC) met in January indicates that “the labor market has continued to strengthen and that economic activity has been rising at a moderate rate.”

It added that “job gains have been strong in recent months and the unemployment rate has stayed low.”

It affirmed that the economic outlook has “strengthened” in recent months and that the Committee expects that “with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong.”

“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1.5 to 1.75 percent.

The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation,” it announced.

It added that “in determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and two percent inflation.”

It affirmed that “this assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”

“The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” it noted.
(T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)