WASHINGTON (AP) – The Federal Reserve appears on track to raise interest rates later this year but signaled Wednesday that it wants to see further economic gains and higher inflation before doing so.
A statement from the Fed after its latest policy meeting provided no timetable. Many analysts foresee the first hike in September, though Fed Chair Janet Yellen has stressed that any increase will be driven by the latest economic data.
The statement noted that the job market, housing and consumer spending have all improved. The Fed also expects inflation to rise gradually toward its 2 percent target.
In an upgraded view of the job market, the Fed now describes job growth as “solid” job growth. But it didn’t alter its outlook on inflation.
Yellen has left little doubt that the Fed is preparing to raise short-term rates by year’s end from the near-zero lows it set at the depths of the 2008 financial crisis. With the U.S. economy and job market now steadily rising, the need for ultra-low rates to stimulate growth is fading.