- FOMC statement
Concluding the FOMC's two-day meeting, Fed Chairwoman Janet Yellen said that the US central bank plans to hike interest rates next year, but it would take a patient approach in deciding on a timing of the first rate hike, which would not take place any earlier than late April. Yellen's comments along with the FOMC statement indicated that the Fed was not inclined to start normalizing its monetary stance more quickly despite recent upbeat economic data, including stronger employment growth and falling oil prices. Still-elevated unemployment rate and below-target inflation provides the central bank with flexibility to take gradual approach to lifting rates. The FOMC statement also showed that the overwhelming majority of policy makers expect the Fed to raise the federal funds rate by 0.75-1.75 percentage points in 2015. Meanwhile, recent decline in gasoline costs pushed US consumer price inflation lower in November, which fell the most in nearly six years. According to the Labor Department, its consumer price index dropped 0.3% last month, the steepest fall since December 2008, after being flat in the preceding month. Measured on an annual basis, CPI rose 1.3%, the smallest increase since February, following the 1.7% advance in October. Stripping out volatile food and energy prices, the core CPI was in line with estimates, rising 0.1% during the reported month, down from 0.2% in October. In the 12 months through November, core CPI climbed 1.7%, keeping its pace of growth, falling slightly from October's 1.8% rise.
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