The Fed says it expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate.
Although monthly job gains have moderated, they still have been solid, while household spending and business investment has been expanding, the statement said.
The decision to push forward on normalisation - the Fed also provided further details of its plan to begin reducing its balance sheet this year - is not without its perils. "The committee now expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated", the Fed said in its statement. The Fed said Wednesday that it would eventually allow a small amount of bonds to mature without being replaced - an amount that would gradually rise as markets adjusted to the process.
The Federal Reserve said Wednesday it plans to slowly shrink the pile of Treasury and mortgage-backed securities it accumulated during three rounds of asset purchases, marking an end to a key strategy it took in response to the financial crisis.
The Fed gave its first clear outline about how it would reduce its US$4.2 trillion portfolio of Treasury bonds and mortgage-backed securities. The dollar was largely flat against a basket of currencies after reversing earlier losses, while the price of gold fell. Greenspan ushered in a more transparent era during his 18-year tenure by talking about the Fed's action and policies more so than his predecessors, while Volcker was adamant about fighting inflation as interest rates soared as high as 20% while he was chair.
UPS says employee shoots, injures 4 at San Francisco center
In a statement , UPS said two employees were being treated in nearby hospitals, but their conditions were not immediately known. A local NBC Affiliate (9News ) in San Francisco reported that "the gunman opened fire on the third floor of the building".
The disappointing data has led some economists to doubt that the central bank will hike again before 2018 - as it has previously projected. They forecast USA economic growth of 2.2 percent in 2017, an increase from the previous projection in March.
Earlier Wednesday, the Bureau of Labor Statistics reported that inflation had slipped below 2 percent, a crucial target for the Fed. A retreat in inflation over the past two months has caused jitters among some Fed officials who fear that the shortfall, if sustained, could alter the pace of future rate hikes.
"The preponderance of Fed speakers in recent weeks has made no attempt to dissuade markets that a hike is coming in June", said Lewis Alexander, Mark Doms, Aichi Amemiya and Robert Dent of Nomura Securities.
"We're not moving so aggressively as to put a brake on continued improvement in the labor market", Yellen said.
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