NEW YORK: The dollar jumped against other major currencies Wednesday as the US Federal Reserve signaled no shift in its expectation to raise interest rates in 2015.
The Fed left its key interest rate, the federal funds rate, at the 0-0.25 percent level, where it has been for six years to help the US emerge from deep recession.
The Federal Open Market Committee "judges that it can be patient in beginning to normalize the stance of monetary policy," the Fed's policy arm said in a statement after a two-day meeting. The central bank insisted the decision will depend on economic data.
The Fed said the policy was consistent with its prior statement that it would only begin normalization "a considerable time" after the end of massive asset purchases, or quantitative-easing stimulus, which occurred at the previous meeting in October.
Although the change in language was subtle, "it was nevertheless a modification consistent with the view that rates are likely to rise in the first half of next year," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
The Fed plan to raise rates in 2015 stands in sharp contrast to additional easing expected by other big central banks, Esiner said.
Harm Bandholz, chief US economist at UniCredit Research, said the new language "does not signal a change in the Fed's policy intentions. It is, however, an important milestone as we are getting closer to the first rate hike."
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