Signaling to alter its pledge to maintain the key rates near zero for a considerable period of time, the Federal Reserve on Wednesday strongly suggested that the US economy is moving in a right track, which is offering them a correct environment to raise interest rates by sometime next year.
The comments came during the closure ceremony of a two-day fed meeting that was called in a backdrop of solid growth in the domestic market, while troublesome situation overseas.
In a released statement, the US central bank said that it will adopt a patient approach while taking final call of hiking interest rates.
Addressing a press conference, Fed Chair Janet Yellen explained ‘patient approach’ as “at least a couple of meetings”.
This connotes that the Fed would not hike the key rates at least until April 2015. Meanwhile, the financial markets are expecting an initial rate hike in October.
“The statement should be interpreted that it is unlikely to begin the normalization process for at least the next couple of meetings. That does not point to any preset or predetermined time,” Yellen told mediapersons during the press meet.
During the meeting, the central bank also looked beyond the economic difficulties in Japan, Russia and the euro zone and also offered a mostly upbeat assessment for the prospects of the US economy.
“Based on its current assessment, the committee judges that it can be patient in beginning to normalize the stance of monetary policy,” Federal bank said.
As the economic growth outlook in the US remained stronger, the Fed policymakers suggested that they would adopt a slower approach for taking call on the pace of future rate hikes.