Fed leaves interest rates unchanged, says inflation near goal new hampshire gas problem in babies

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Federal Reserve Chairman Jerome Powell testifies on monetary policy, before the House Financial Services Committee on Capitol Hill in Washington, D.C., U.S., Feb. 27, 2018. Federal Reserve officials on Wednesday held their key interest rate steady despite rising inflation and fears of a global trade war triggered by President Donald Trump’s tariffs. (Olivier Douliery/Abaca Press/TNS)

WASHINGTON — The Federal Reserve held interest rates steady on Wednesday and expressed confidence that a recent rise in inflation to near the U.S. central bank’s target would be sustained, leaving it on track to raise borrowing costs in June.

After the release of the Fed’s statement, traders of U.S. short-term interest rate futures kept bets that rates would rise at least two more times in 2018. U.S. stocks pared losses before turning lower, Treasury yields briefly edged higher, and the dollar was off its highs of the day against a basket of currencies.

The Fed’s confidence in the economic outlook was also highlighted by its assertion that business fixed investment had continued to grow strongly. It added that risks to the outlook appear roughly balanced, removing a prior reference to “near-term risks.”

Although economic growth slowed to an annualized rate of 2.3 percent in the first quarter, a period that has tended to be weaker in recent years, and job gains cooled in March, a pickup is expected in the months ahead, fueled in part by the Trump administration’s tax cuts and fiscal stimulus.

The economy is now in its second-longest expansion since World War II. The unemployment rate is at a 17-year low of 4.1 percent, below the Fed’s longer-run estimate of what constitutes full employment, and there are signs wages are moving firmly higher.

Federal Reserve Chairman Jerome Powell testifies on monetary policy, before the House Financial Services Committee on Capitol Hill in Washington, D.C., U.S., Feb. 27, 2018. Federal Reserve officials on Wednesday held their key interest rate steady despite rising inflation and fears of a global trade war triggered by President Donald Trump’s tariffs. (Olivier Douliery/Abaca Press/TNS)

WASHINGTON — The Federal Reserve held interest rates steady on Wednesday and expressed confidence that a recent rise in inflation to near the U.S. central bank’s target would be sustained, leaving it on track to raise borrowing costs in June.

After the release of the Fed’s statement, traders of U.S. short-term interest rate futures kept bets that rates would rise at least two more times in 2018. U.S. stocks pared losses before turning lower, Treasury yields briefly edged higher, and the dollar was off its highs of the day against a basket of currencies.

The Fed’s confidence in the economic outlook was also highlighted by its assertion that business fixed investment had continued to grow strongly. It added that risks to the outlook appear roughly balanced, removing a prior reference to “near-term risks.”

Although economic growth slowed to an annualized rate of 2.3 percent in the first quarter, a period that has tended to be weaker in recent years, and job gains cooled in March, a pickup is expected in the months ahead, fueled in part by the Trump administration’s tax cuts and fiscal stimulus.

The economy is now in its second-longest expansion since World War II. The unemployment rate is at a 17-year low of 4.1 percent, below the Fed’s longer-run estimate of what constitutes full employment, and there are signs wages are moving firmly higher.