Nafiz Albayrak - New York, July 30 () - U.S. Federal Reserve (Fed) kept the interest rates unchanged, but left the door open for a possible interest rate hike when Federal Open Market Committee (FOMC) members next meet in September.
Following their latest two-day policy meeting, FOMC said in a statement that the economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas.
They pointed to the "solid job gains" seen in recent months. "On balance, a range of labor market indicators suggest that underutilization of labor resources has diminished since early this year" the Fed said in a policy statement that kept rates unchanged.
That language and other small changes in the statement mark an upgrade in the FOMC members' view of labor conditions since its last policy meeting in June, when it said labor slack had "diminished somewhat."
The Fed also said in the statement that, it only needs to see "some" more improvement in the labor market, a qualification that analysts said strongly suggested it believes the recent solid U.S. job gains will continue.
The Fed, in its statement, warmed up the expectations of a rate hike in September, but it didn't give a clear signal of its plans. Besides the additional improvement on the labor front, it said it also needed to be more confident that low inflation will rise to the 2 percent medium-term target.