The U.S. central bank kept interest rates on hold but opened the door to another rate hike in June by signaling confidence in the U.S. economy. Bobbi Rebell reports.
The Fed is getting a bit more confident about the U.S. economy. And although the central bank held off again on raising rates after its two-day policy meeting, its statement signaled that a June rate hike is possible. The Fed said that the labor market had improved despite a recent economic slowdown. On inflation, the Fed said it was expected to remain low in the near term in part because of lower energy prices. The Fed also noted that households' real income had risen at a "solid rate" and consumer sentiment remained high. And it added that while global economic headwinds remain on its radar, the Fed removed a specific reference to the risks they posed. The de-emphasis on global concerns now puts the spotlight on domestic data says Stifel's chief economist, Lindsey Piegza: SOUNDBITE: LINDSEY PIEGZA, CHIEF ECONOMIST, STIFEL (ENGLISH) SAYING: "If we see a rebound in consumer spending, if we see more favorable conditions in terms of business investment in the housing market, I think the Fed is really opening the door for a near term rate increase." The Fed hiked rates in December for the first time in nearly a decade. Futures traders still betting it will next hike rates in September.