(MENAFN- Kuwait News Agency (KUNA)) The US Federal Reserve said that policymakers indicate a positive outlook for the US economy, with an improving job market and increased consumer spending, adding it will be "patient" in developing its monetary policy.
"On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish," said the Fed in a statement.
"Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power.
"Business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has declined further below the (Federal Open Market) Committee's longer-run objective, largely reflecting declines in energy prices." Additionally, "Market-based measures of inflation compensation have declined substantially in recent months," as "survey-based measures of longer-term inflation expectations have remained stable," the Fed affirmed.
The Federal Open Market Committee (FOMC), which is responsible for the Fed's open market operations, noted in the statement that it expects, "with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate." The FOMC also "continues to see the risks to the outlook for economic activity and the labor market as nearly balanced.
"Inflation is anticipated to decline further in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate," the statement said.
In order to "support continued progress," the FOMC "reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate," and it will further "assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation." Looking at its current assessment, "the Committee judges that it can be patient in beginning to normalize the stance of monetary policy," the statement said.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."
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