WASHINGTON - The Federal Reserve Board's Federal Open Market Committee said Wednesday it would maintain its near-zero target interest rate as expected, citing sluggish growth estimates since the previous meeting in March that it ascribed to "transitory" economic factors.
"Information received since the [FOMC] met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors," the committee said in its statement. "Although growth in output and employment slowed during the first quarter, the Committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate."
Fed Chair Janet Yellen has said in the past that certain economic factors - including low energy prices, low inflation and a strong dollar - are creating obstacles to raising interest rates in the short term but do not represent long-term structural trends that would head off rate increases for long. During her most recent post-FOMC meeting press conference on March 18, Yellen all but guaranteed that no rate increase would emerge from the April 28-29 meeting because of concerns about lower-than-expected inflation rates and stagnant employment and economic growth.
Yellen has repeatedly said that the Fed's interest rate "liftoff" will depend entirely on circumstances surrounding each meeting, though a vast majority of FOMC members believe that rates should rise this year, with an ideal end-of-year target rate between 0.5% and 1.5%. Many analysts have noted that, to reach that target, the FOMC would have to begin raising rates by September at the absolute latest.