Fed drops "patient" in describing timing for first rate hike
The Federal Reserve is signaling that it's edging closer to raising interest rates from record lows in light of a strengthening job market. The Fed no longer says it will be "patient" in starting to raise its benchmark rate.
The central bank did say a rate increase at its next meeting in April was unlikely. Most analysts believe that dropping the word "patient" makes a rate increase in June likely. The Fed says it will raise rates when it is "reasonably confident" that inflation is moving toward its 2 percent goal.
The Fed has kept its key short-term rate near zero since late 2008 to bolster the economy after a devastating financial crisis and recession. A Fed rate hike would push up consumer and business rates.
The central bank also forecast that the U.S. unemployment rate can now fall further without spurring inflation, a sign that it may move slowly in raising interest rates.
Fed officials reduced their estimate of the unemployment rate that they think is consistent with a healthy economy to a range of 5 percent to 5.2 percent. That is down from a previous range of 5.2 percent to 5.5 percent. Unemployment now stands at 5.5 percent, the top of the previous range.
The Fed also sharply reduced its forecasts for economic growth through 2017 from its December projections. It now expects just 2.5 percent growth this year and next, down from 2.8 percent and 2.75 percent, respectively. Growth will then slow to 2.2 percent in 2017, the Fed predicts, down from 2.4 percent.