Federal Reserve will keep interest rates near zero “for a considerable time,” but signaled Wednesday that it will raise interest rates some time next year.
“Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy,” the Fed said following a two-day meeting, stopping short of saying when it might raise interest rates. “Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy.”
The Fed lowered its inflation prediction for 2015 to between 1 percent and 1.6 percent.
In a press conference, Fed Chair Janet Yellen emphasized that the Fed is unlikely to boost interest rates until after “a couple of meetings” next year.
Any rate hikes would be “data dependent,” she added. The Fed has not taken such an action since June 2006.
Stock markets surged on the Fed’s announcement, with the Dow trading 300 points higher before slightly dipping back later in the day.
The announcement comes as the U.S. economy in November recorded some of its biggest job growth since 1999.
Last month’s figures saw a boost in jobs well above 300,000, lowering unemployment to 5.8 percent.
Yellen said that a further drop in unemployment could help to raise inflation to the Fed's target of 2 percent.
"A slight period of unemployment below natural rate will facilitate return of inflation to objective," she said.
Yellen added that, on the whole, the global decline in oil prices is likely to be a positive for the U.S. economy.
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