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Fed keeps interest rate on hold again US Fed moves closer to rate hike this year
(34 minutes later)
The US Federal Reserve has kept its key interest rate at close to zero again, in a move widely expected by analysts. The US Federal Reserve has indicated it is more positive on the US economy, confirming views it is likely to raise interest interest rates this year.
The unanimous decision means the rate has been at a record low for six and a half years. The US central bank said it had unanimously agreed to keep rates at close to zero this month, but believed the economy was on a stronger footing.
The Fed has kept its benchmark interest rate at a range between zero and 0.25% since December 2008. "Economic activity has been expanding moderately in recent months," it said in a statement.
The US central bank's decision to cut the rate to such a low level was aimed at boosting growth in the economy amid the global financial crisis. But it still did not give a clear indication of when rates would rise.
In its statement, the Fed noted that the job market, housing and consumer spending had all improved.
The central bank's policy makers also said they expected inflation to rise gradually toward its 2% target.
On employment - which is now at a seven-year low of 5.3% - the bank said job gains had been "solid", more positive language than last month.
But it again reiterated that it would only hike its benchmark interest rate "when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective".
'Baby steps'
"The Fed is taking baby steps towards a rate hike," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds.
The interest rate has now been at a record low for six and a half years.
The US central bank's decision to cut the rate to such a low level in December 2008 was aimed at boosting growth in the economy amid the global financial crisis.
Most analysts expect the first hike in September, but Federal Reserve chair Janet Yellen has emphasised that any increase will be determined by the latest economic data.
She has also said that when rates do begin to rise, the increase will only be gradual.