U.S. central bank policy makers downplayed weak economic growth. That's a sign they could rase rates as early as June. Fred Katayama reports.
The Federal Reserve is staying put. It kept interest rates unchanged as expected. The central bank's policy makers sounded bullish in the statement it released upon the conclusion of their two day meeting. They downplayed the recent signs of slowing economic growth such as the weak first quarter GDP report, softening inflation, and disappointing job growth in March. They characterized that slowing growth as "transitory," emphasizing the strength of the labor market and solid consumer spending. That signals the Fed could raise rates as early as June. Bankrate.com chief financial analyst Greg McBride: SOUNDBITE: BANKRATE.COM, SENIOR VICE PRESIDENT, CHIEF FINANCIAL ANALYST, GREG MCBRIDE, (ENGLISH) SAYING: "Coming into the year, the Fed had projected three rate hikes this year. And by all indications, that remains on track. We got one in March. That'd mean we'd get two more in the balance of the year. That's certainly what markets expect. The Fed didn't have anything in the statement that would dissuade markets from believing that." Stocks pared their losses minutes after the rate decision. The yield on the benchmark 10 year Treasury rose. And the Dollar Index edged higher. The Fed is in its first tightening cycle in more than a decade. It raised interest rates by a quarter percentage point in March to a target range of 0.75 to 1 percent. Fed officials have signaled that they're likely to raise rates two more times this year.