Fed keeps key rate steady but notes rising inflation
WASHINGTON — The Federal Reserve kept its benchmark interest rate unchanged Wednesday but noted that inflation is nearing its 2 per cent target rate after years of remaining undesirably low.
The Fed ended its latest policy meeting by leaving its key short-term rate unchanged at 1.5 per cent to 1.75 per cent, the level it set in March after its sixth rate increase since December 2015. The Fed is gradually tightening credit to control inflation against the backdrop of a tight job market, a resilient economy and a pickup in consumer prices.
In a statement, the central bank said it expects “further gradual increases” in rates and says recent data show it’s edging close to achieving its annual 2 per cent target for annual inflation.
“Inflation on a 12-month basis is expected to run near the committee’s symmetric 2 per cent objective over the medium term,” the Fed said.