- Janet Yellen, Fed Chairwoman
Referring to an improving economy, the Fed signalled that it is on track to hike all-time low interest rates as early as September. Yet, the rates are likely to rise more gradually than it was previously thought. While the economy heads a 2% growth this year, concerns remain over the recovery of the nation's labour market, low labour force participation rate and high level of part-time employment. Thus, Fed Chairwoman Janet Yellen reiterated that she looked for "more decisive evidence" that the labour market was healing and wages would grow beyond the current sluggish pace.
The Fed also downgraded its US economy's growth outlook, stating that gross domestic product of the world's number one economy is poised to expand between 1.8% and 2.0% in 2015, compared with the central bank's March forecast of between 2.3% and 2.7%. In addition to that, policy makers expect the unemployment rate to be slightly higher at the end of the year at 5.2% to 5.3% compared with the previous estimate. With regards to inflation, the central bank admitted that it remains low and projected a gradual rise to its 2% over the medium term. Despite a slightly gloomier forecasts, the Fed remains on track to lift interest rates once or twice over its four remaining monetary policy meetings this year.
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