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Fed leaves interest rates unchanged, signals two hikes this year - UPDATED

Fed leaves interest rates unchanged, signals two hikes this year - <span style="color: red;">UPDATED

15 June 2016 22:08 (UTC +04:00)

Baku-APA. The Federal Reserve kept U.S. interest rates unchanged on Wednesday and signaled it still planned two hikes this year, although a slowing economic growth path for 2016 and 2017 prompted a downgrade in where the U.S. central bank thought rates would peak, APA reports quoting Reuters.

Even this year's rates projection was less secure than previously, however. Six of the Fed's 17 individual forecasts from governors and regional Fed presidents projected just one hike this year, compared with one such outlook when the forecasts were last issued three months ago.

"We are quite uncertain about where rates are heading in the longer term," Fed Chair Janet Yellen told a news conference after the rate decision.

The U.S. central bank lowered its economic growth forecast for 2016 to 2.0 percent growth from 2.2 percent and its outlook for 2017 to 2.0 percent from 2.1 percent.

It also cut its longer term view of the appropriate federal funds rate by a quarter point to 3 percent and indicated it would be less aggressive in tightening monetary policy after the end of this year.

Yellen gave no clues as to whether a rate hike could come as early as the Fed's next rate-setting meeting in July, or whether the central bank would wait for a slew of firmer data as it headed into its September meeting. Markets have all but priced out any rate rise in 2016.

"While the recent labor market data have on balance been disappointing, it's important not to overreact to one or two monthly readings," she said, adding the Fed expected jobs to strengthen further.

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22:08

Baku-APA. The Federal Reserve kept interest rates unchanged on Wednesday but signaled it still plans two rate increases this year, saying it expects the U.S. job market to strengthen after a recent slowdown, APA reports quoting Reuters.

The U.S. central bank, however, lowered its economic growth forecasts for 2016 and 2017 and indicated it would be less aggressive in tightening monetary policy after the end of this year.

The Fed left its target range for overnight lending rates between banks at between 0.25 percent to 0.50 percent, keeping on hold a campaign to lift borrowing costs that started late last year.

The Fed raised rates in December for the first time in nearly a decade and signaled four increases were likely in 2016. Concerns about a global economic slowdown and volatility in financial markets subsequently reduced that number to two.