Fed policy stance ‘appropriate’ for now, Latest Business News - The New Paper

Fed policy stance ‘appropriate’ for now

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WASHINGTON: The US Federal Reserve on Wednesday held interest rates steady and signalled little appetite to adjust them any time soon, taking heart in job gains, growth and the likelihood that weak inflation will edge higher.

"We think our policy stance is appropriate at the moment; we don't see a strong case for moving it in either direction," Fed chair Jerome Powell said in a press conference.

Overall, he said: "I see us on a good path for this year."

Fed policymakers said economic growth, a strong labour market and eventual rise in inflation were still "the most likely outcomes" as the US expansion nears its 10-year mark.

"The labour market remains strong... economic activity rose at a solid rate" in recent weeks, the Fed said in a policy statement a day after US President Donald Trump called on it to cut rates by a full percentage point and take other steps to stimulate the economy.

The policy statement and Mr Powell's insistence the Fed saw no reason to consider a rate cut in response to weak inflation, prompted a modest selloff in stock markets and pushed bond yields higher.

Interest rate futures reversed direction, signalling a lower degree of confidence the next Fed move would be a rate cut, the point Mr Powell was driving at in a "stay-the-course" message, said analysts at Cornerstone Macro. - REUTERS