Fed holds rates steady but points to higher inflation
Arirang News
2018-05-03
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미 연준, 기준금리 동결..."중기적으로 물가 2% 도달"
In a widely expected move,... the U.S. Federal Reserve left its rates unchanged.
Their reason behind the decision: the economy is robust, and inflation is finally going up, after years of being stuck below its two-percent target level.
Kim Hyesung help us look beyond the numbers.
The U.S. Federal Reserve kept its benchmark interest rate unchanged Wednesday at a target of 1-point-5 percent to 1-point-7-5 percent.
The decision, following a two-day policy meeting in Washington, was unanimous.
Policymakers pointed to fewer Americans out of work and strong growth in business investment as signs of economic resilience.
They said risks to the economic outlook appear roughly balanced, removing a prior reference to “near-term risks."
But most importantly, after around six years of price gains falling short of its two percent goal, the Fed said inflation had moved close to its target.
In a statement, the Federal Open Market Committe noted that iInflation on a 12-month basis is expected to run near the committee’s symmetric 2 percent objective over the medium term,"... an upgrade from the March meeting in which the FOMC said the indicators "have continued to run below 2 percent."
"The inclusion of 'symmetric' in its statement is a sign that the Fed could tolerate inflation running slightly above two percent for sometime without being too hawkish, allaying market concerns in a way. But still, with inflation finally reaching its target, on top of solid domestic economy, it could raise three more rate hikes instead of two this year."
Currently, South Korea's base rate of one-and-a-half percent is lower than that of the U.S. for the first time in more than 10 years following the Fed's rate hike in March, raising concerns of possible capital outflow in the country.
The Bank of Korea left its key rate unchanged in April, citing low inflation and high unemployment.
But with the Fed highly likely to raise rates in June, it could put more pressure on the Bank of Korea to lift its own rates.
Kim Hyesung, Arirang News.
In a widely expected move,... the U.S. Federal Reserve left its rates unchanged.
Their reason behind the decision: the economy is robust, and inflation is finally going up, after years of being stuck below its two-percent target level.
Kim Hyesung help us look beyond the numbers.
The U.S. Federal Reserve kept its benchmark interest rate unchanged Wednesday at a target of 1-point-5 percent to 1-point-7-5 percent.
The decision, following a two-day policy meeting in Washington, was unanimous.
Policymakers pointed to fewer Americans out of work and strong growth in business investment as signs of economic resilience.
They said risks to the economic outlook appear roughly balanced, removing a prior reference to “near-term risks."
But most importantly, after around six years of price gains falling short of its two percent goal, the Fed said inflation had moved close to its target.
In a statement, the Federal Open Market Committe noted that iInflation on a 12-month basis is expected to run near the committee’s symmetric 2 percent objective over the medium term,"... an upgrade from the March meeting in which the FOMC said the indicators "have continued to run below 2 percent."
"The inclusion of 'symmetric' in its statement is a sign that the Fed could tolerate inflation running slightly above two percent for sometime without being too hawkish, allaying market concerns in a way. But still, with inflation finally reaching its target, on top of solid domestic economy, it could raise three more rate hikes instead of two this year."
Currently, South Korea's base rate of one-and-a-half percent is lower than that of the U.S. for the first time in more than 10 years following the Fed's rate hike in March, raising concerns of possible capital outflow in the country.
The Bank of Korea left its key rate unchanged in April, citing low inflation and high unemployment.
But with the Fed highly likely to raise rates in June, it could put more pressure on the Bank of Korea to lift its own rates.
Kim Hyesung, Arirang News.
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