Fed nods to firmer prices; expresses concern about labour weakness

[WASHINGTON] The Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the US economy and expressed some comfort that inflation was moving up towards its target.

After a two-day meeting, Fed policymakers took note of both faster economic growth and a decline in the jobless rate, but expressed concern about remaining slack in the labour market. "Labour market conditions improved, with the unemployment rate declining further," the Fed said. "However, a range of labour market indicators suggests that there remains significant underutilisation of labour resources."

The reference confirmed that the central bank believes there is still a distance to go before benchmark borrowing costs need to move higher despite an improving outlook for jobs and prices.