Look to the fall or the winter for the Federal Reserve to raise interest rates.
The central bank announced no increase to its target rate Wednesday after a two-day meeting in Washington.
Many analysts had previously expected that Chairwoman Janet Yellen and other Fed officials would move to lift their target interest rate from zero this month.
Weak first-quarter economic growth and low inflation however, delayed the Fed’s plans for tightening monetary policy.
Nevertheless, the Fed statement Wednesday indicated that officials think that the problems that held back commerce earlier in the year have passed, and they now expect growth to pick up over the year, as the economy is “expanding moderately after having changed little during the first quarter.”
But the damage is done: Fed members now see economic output coming in at 2 percent at best in 2015, down from a 2.3 percent to 2.7 percent projection in March.
The announcement reiterated Yellen and company’s commitment to raising rates after they see further job growth and are reassured that inflation is heading up toward their 2 percent growth.
Officials’ projections for inflation in 2015 were unchanged from March. The statement suggested that the committee believes that the temporary downward pressure on inflation from falling oil prices has abated.
Wednesday’s decision, widely expected by investors, now solidifies expectations for the Fed to move in September or December.
A majority of Fed members see the target interest rate as high as 0.5 percent to 1 percent by the end of the year, according to projections released alongside the policy statement, reflecting the possibility of multiple rate hikes.
The Fed has held short-term interest rates near zero since late 2008 in an effort to boost the U.S. economy. The Fed’s target rate influences all other rates throughout the economy, including interest rates on mortgages and business loans, affecting corporate investment and consumer spending.
This month marks nine years since the the Fed last raised rates in June 2006.
None of the 10 voting members of the committee dissented from the statement.
