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Federal Reserve To Markets: Nothing To See Here; Move Along

"There are still too many people who want jobs but cannot find them," Federal Reserve Chair Janet Yellen said Wednesday.
Susan Walsh
/
AP
"There are still too many people who want jobs but cannot find them," Federal Reserve Chair Janet Yellen said Wednesday.

The Federal Reserve's policymakers just eyeballed the economy and saw nothing new.

On Wednesday, they announced that wage and price hikes remain low, and that growth continues at a moderate pace. That means interest rates can stay superlow for a "considerable time," while the Fed's bond-buying program can wrap up next month, as expected.

In recent years, the Fed, which serves as the nation's central bank, has pushed interest rates to historic lows to help stimulate the economy. Some critics think it's time to let rates rise enough to slow growth before inflation can take hold.

Fed Chair Janet Yellen disagrees.

"There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work, and too many who are not searching for a job but would be if the labor market were stronger," Yellen told reporters.

Some economists had predicted the Fed might change its guidance about coming interest rate hikes to reflect a somewhat more optimistic view. But the Fed downgraded the 2015 forecast for real GDP growth to the range of 2.6 to 3 percent, lower than the previous 3 to 3.2 percent prediction.

But that downgrade — as well as other language changes in the Fed statement — amount to minor tweaks.

"The Fed's assessment of the economy hasn't changed significantly," said Kathy Jones, fixed-income strategist at Schwab.

You can go back to your nap now.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Marilyn Geewax is a contributor to NPR.
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