The US Federal Reserve (Fed) refrains from raising key interest rate again. After march increase, it left monetary policy key set in range of 1.5 to 1.75 percent. The participants in financial markets, however, expect next step to be taken in June, in view of inflation and de facto full employment achieved.
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The Fed nurtured this expectation by pointing to progress on path to achieving self-imset inflation target. It aspires to an inflation rate of two percent and has approached ideal in March with 1.9 percent. The inflation rate will probably move near this level in medium term, according to Fed’s forecast.
The monetary authorities also acknowledged strength of labour market. With 4.1 percent, unemployment rate is already at its lowest level for 17 years.
The Fed has planned a total of three interest rate hikes for this year, but some experts expect four steps. They expect monetary authorities to be more strongly opposed to an impending overheating of economy, which is furr fuelled by US President Donald Trump’s radical tax reform.
The New York Stock markets responded positively to Fed: The Dow Jones index of standard values increased 0.2 percent, and wider S P 500 won 0.1 percent. The Nasdaq built up previous profits and recorded 0.4 percent higher. The dollar index, on or hand, turned into minus.
