WASHINGTON: The US Federal Reserve kept its benchmark interest rates untouched at the record-low level of near zero, as the economic recovery continues amid growing concerns over inflation spike. The Fed Reserve noted that the sectors most adversely affected by the pandemic "remain weak but have shown improvement".
"Progress on vaccinations has reduced the spread of Covid-19 in the United States. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened," the Fed statement issued on Wednesday reads
With inflation having run persistently below the 2 percent longer-run goal, the Federal Open Market Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent, the Fed reiterated, acknowledging that inflation has risen, "largely reflecting transitory factors." The Fed's statement came days after the Labour Department reported that consumer prices rose 0.6 percent in May, with a 12-month increase of 5.0 percent, marking the largest 12-month increase since the period ending August 2008.
Excluding the volatile food and energy categories, the so-called core consumer price index (CPI), the Fed's preferred inflation measure, rose 0.7 percent in May, following a 0.9 percent increase in April.
Q1 GDP Data for India, Brazil Suggest Strong Post-Pandemic Rebound: Moody’s
US Budget Deficit Grew to Record USD 2.1 Trillion in Fiscal Year's First 8 Months