ANKARA
The U.S. Federal Reserve said in a statement on Wednesday that it would not raise interest rates at this time.
"The current 0 to 1/4 percent target range for the federal funds rate remains appropriate," the central bank said.
"In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation,” it said.
Analysts at Goldman Sachs predicted that the Fed was closer to making a rate hike than ever before. It is clear that one will come before the end of the year, and September is a possible date, but later, at the end of the year is more likely, said Goldman Sachs in a note on Wednesday.
Speaking at a press conference after the announcement, Federal Reserve Chairwoman Janet Yellen said that the weak labor market in the U.S., as well as the slow progress in the inflation outlook, were the two principal reasons for the June rates decision.
The unemployment rate, expected to be about 5.2 to 5.3 percent at the end of the year, will be higher than previously forecast.
Low energy prices have also contributed to keeping inflation lower than expected, although Yellen said it would rise to about 1.8 percent by the end of this year.
Yellen said the factors slowing economic growth were "transitory and abating", adding that once there were significant signs of improvement in employment and inflation, an up-to-1 percent increase could be expected by December.
"Energy prices are rising, and there is reason to expect a further improvement in labor market conditions," Yellen said. "We are reasonably confident that inflation will improve over the medium term."
That would be the first increase from near-zero rate levels since December 2008.
Yellen showed a chart indicating a possible interest rate increase of up to 1 percent this year, up to 3 percent in 2016, and up to 4 percent in 2017.
But Yellen insisted that all projected rate increases were contingent on further economic improvement, and that eventual rate rises would be gradual.
