US Fed leaves rates unchanged amid slower economic growth

The Fed raised rates 0.25 percent to a 0.75 to 1 percent target range in March, three months after another 0.25 percent hike in December.

Investors now placed a 94 percent chance of a rate hike at the Fed's June 13-14 meeting, up from roughly 70 percent ahead of the release of the Fed's statement, according to an analysis of Fed funds rate futures.

The Federal Reserve left interest rates unchanged on Wednesday, as was widely expected, and gave a positive assessment of the US economy, suggesting it was still on track for two more rate hikes this year.

Economists polled by Reuters expect USA employers to have added 185,000 jobs in April, up from 98,000 in March.

The Federal Reserve will not raise interest rates when they meet this week, but rates could increase by this summer, said Greg McBride, chief financial analyst for Bankrate, the NewYork-based financial content company.

Before this week's meeting most Fed policymakers had made it clear that in contrast to previous years the central bank feels more confident in its forecast of two more rate increases in 2017.

Analysts expect the Fed to focus more intensely on the balance sheets after the next interest rate hike.

The firm wage growth helped offset news on Friday that the US economy grew at its weakest pace in three years in the first quarter as consumer spending nearly stalled.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, slipped 0.1 percent on Wednesday after earlier climbing as much as 0.25 percent. The Fed will have two more employment growth reports to hand before its next meeting.

"The FOMC views the slowing in growth during the first quarter as likely to be transitory", the statement said, in unusually dismissive language.

Meanwhile, on the jobs and inflation front, the Federal Reserve said that the labour market has continued to strengthen, as job gains were "solid" in recent months, while inflation continued to run somewhat below 2%.

The euro edged down 0.1 percent to $1.0915, trading within sight of a 5-1/2 month high of $1.0951 scaled last week after the centrist Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections.

"However, we do expect a period of consolidation to set in fairly shortly and do not see a substantial drop below the $1,200 level for gold anytime soon".

"The ECB (European Central Bank) may be talking about policy normalization, but at the end of the day they're still easing; they're still expanding the balance sheet", said Barclays currency strategist Hamish Pepper, in London.



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