Fed says risks have diminished as it leaves rates unchanged

Washington

THE Federal Reserve has left interest rates unchanged while saying risks to the US economy have subsided and the labour market is getting tighter, suggesting conditions are getting more favourable for an increase in borrowing costs.

"Near-term risks to the economic outlook have diminished," the Federal Open Market Committee (FOMC) said in its statement on Wednesday after a two-day meeting in Washington, before repeating language from June that the panel "continues to closely monitor" inflation and global developments. Job gains were "strong" in June and indicators "point to some increase in labour utilisation in recent months", the Fed said.

US central bankers are taking stock of the economy's progress in the wake of the UK's vote last month to leave the European Union, as well as the large swing from M…