The US Federal Reserve left its monetary policy unchanged as policymakers delivered minor changes to their US economic outlook, toning down the description of labor market improvements and noting the recent pick-up in inflation.
Fed chairman Ben Bernanke affirmed the central bank was “prepared to do more” despite an apparent hawkish shift in Federal Open Market Committee members expecting rates to rise before late 2014. The FOMC statement maintained the bank’s language of foreseeing “exceptionally low levels” in two years’ time, while Fed officials upgraded growth forecasts for this year to 2.4% - 2.9% (January projection: 2.2% - 2.7%). Only four officials, compared with six in January, believe ultra-low rates will remain in place to the end of 2014. “We remain entirely prepared to take additional balance sheet actions as necessary to achieve our objectives,” Ben Bernanke commented.