The Federal Reserve said on Wednesday it does not plan to raise interest rates immediately, however, it will start a tightening of monetary policy as early as March. The regulator wrote in a press release that financial conditions "remain accommodative" as job gains have been "solid in recent months," and the unemployment rate has declined.
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However, the Fed hinted it will soon be "appropriate to raise the target range for the federal funds rate." The regulator particularly said:
"In support of these goals, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent. With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate."
While the central bank did not specify when or how much it would raise the federal funds rate, it plans to continue tightening its purchases of securities. The Fed's next monetary policy committee is scheduled on March. Beginning in February, the Fed will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month.
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