ANKARA
The Federal Reserve held interest rates at their current levels on Wednesday but hinted the U.S. economy had improved sufficiently for a rate rise soon.
Rates will remain at near-zero levels in the U.S., but the emphasis in a statement from the Federal Open Market Committee (FOMC) was on economic strengths accrued since a meeting last month.
Factors cited in the statement included moderate growth in household spending and improvement in the housing sector; labor market improvements with declining unemployment; suggestions that there has been a reduction in labor underutilization since early 2015; and that economic activity is expected to expand at a moderate pace.
However, the Fed noted that inflation had not moved towards the target of below 2 percent. Two weeks ago, Federal Reserve Chairwoman Janet Yellen told Congress that progress on inflation would be a key factor in a rate-hike decision.
The Fed has not raised rates since 2008 but any rise is expected to be small when it does come and future increases will be gradual, 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."
The policy could prove important for emerging market currencies, which risk losing value once the Fed finally does raise rates. The Turkish lira held at about 2.76 to the dollar following the Fed statement.
