In a unanimous vote, the Federal Reserve decided to keep interest rates unchanged at 1.5 to 1.75% Wednesday. However, it noted that it expects inflation to “run near” its 2% target “over the medium term,” suggesting that interest rates might see a hike in June.
Information since the Federal Open Market Committee met in March suggests that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate.
The committee says it expects “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. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”
The committee made the statement following a two-day meeting. Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams all voted for the monetary policy.
The group raised rates during its March meeting.