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Federal Reserve leaves interest rate unchanged, notes higher inflation

WASHINGTON, The Federal Reserve unanimously agreed to leave interest rates unchanged and noted that inflation is reaching closer to its goal, according to a statement from the Federal Open Market Committee on Wednesday.

The group held the funds rate at a target of 1.5 percent to 1.75 percent, as expected.

“Overall inflation and inflation for items other than food and energy have moved close to 2 percent,” it said.

“Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced,” the statement added.

The Fed has lifted rates six times since December 2015 but analysts anticipated that it would hold off on lifting the rate despite a welcomed outlook and increase in inflation.

“In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation,” it said.

The committee 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.

Source: Kuwait News Agency