Fed leaves rates unchanged as inflation rises

Fed leaves rates unchanged as inflation rises

The Federal Reserve on Wednesday kept interest rates steady as the central bank continues to gauge increases in inflation and industrial stresses on an otherwise solid economy.

The Fed kept interest rates at the 1.5 to 1.75 percent target range it set in March — the first rate hike under Chairman Jerome Powell, who took control of the bank in February.

Fed officials were not expected to raise rates Wednesday, but will likely increase rates at least twice more in 2018. The bank is aiming to return interest rates to historic normal averages while allowing the economy to grow at a stable pace.

The Fed said “on a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent.”

“Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term,” the Fed said.

The Fed indicated that it would continue with gradual rate hikes without accelerating the timeline in response to inflation.

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