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Comparing US Federal Reserve’s views on rate rise timing

March 18, 2015

A comparison of the Federal Reserve’s statements from its two-day meeting that ended Wednesday and its meeting January 27-28:

INTEREST RATES:

Now: The Fed no longer says it can be patient about raising rates: “Consistent with its previous statement, the (Fed) judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. The (Fed) anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”

Then: “Based on its current assessment, the (Fed) judges that it can be patient in beginning to normalize the stance of monetary policy.”

ECONOMY:

March: The Fed is a bit more pessimistic about growth: “Information received since the (Fed) met in January suggests that economic growth has moderated somewhat. ... (and) export growth has weakened.”

January: “Information received since the (Fed) met in December suggests that economic activity has been expanding at a solid pace.”

INFLATION:

March: The Fed expects inflation to level off at its current level: “Inflation is anticipated to remain near its recent low level in the near term, but the (Fed) expects inflation to rise gradually toward 2 percent over the medium term....”

January: “Inflation is anticipated to decline further in the near term, but the (Fed) expects inflation to rise gradually toward 2 percent over the medium term....”

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