The Fed has abandoned its promise that it will be “patient” before raising interest rates. In the statement published this evening, the Central Bank led by Janet Yellen writes that "labour market conditions have further improved, with strong job gains and a lower unemployment rate".
To support the continuous progress towards maximum employment and price stability, the Commission confirmed the current rates between 0 and 0,25%, leaving the hands free to increase the cost of money in the next meetings, in what would the first hike in nearly a decade. Thus the term “patient” disappears from the press release.
Indeed, the Fed believes that “it will be appropriate to raise rates when further improvements in the labor market have been seen and when it is reasonably confident that inflation will return to 2% in the medium term”.
"This change in forward guidance - the central bank specified - does not indicate that the Commission has decided on the timing of the start of the rate hike". At the same time, the Commission notes that it considers an increase at the April meeting unlikely.
