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1st LD: U.S. Fed signals interest rate hike on track this year

Xinhua, June 18, 2015 Adjust font size:

The Federal Reserve signaled that it was on track to raise the benchmark interest rate this year despite the lower-than-expected economic outlook.

In its quarterly economic projections released on Wednesday, 15 out of 17 Fed board members and Fed bank presidents expected the appropriate timing for the first interest rate hike in almost nine years will be in 2015, and only two officials saw 2016 will be the appropriate timing.

In the meantime, the Fed officials lowered their forecast for this year's economic growth to 1.8-2 percent, compared to its March projection of 2.3-2.7 percent. The revised-down figure mainly reflected the economic contraction in the first quarter, which was in part due to transitory factors, said Fed chair Janet Yellen at a press conference Wednesday.

Despite the lower-than-expected economic outlook, the U.S. central bank continues to see improvements in the labor market and economic performance.

"Economic activity has been expanding moderately after having changed little during the first quarter," the Fed said in a statement after a two-day meeting of its Federal Open Market Committee (FOMC), the Fed's chief body for monetary policy. The pace of job gains picked up and the underutilization of labor resources diminished somewhat, it added. Endite