US Fed remains vague on interest rate rise date

<p>The Fed said no date was set for an interest rate rise although it confirmed the end of the stimulus.</p>

The US Federal Reserve said yesterday (September 17th) that there was no "calendar date" for an interest rate rise.

It added it will raise interest rates once a "considerable time" has passed after its stimulus programme ends in October.

"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's two per cent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said.

US markets rose following her comments and the confirmation that the stimulus programme, otherwise known as quantitative easing, will end next month.

"If the events surprise us and we are moving more quickly toward our objectives and the Committee sees a need to move sooner, or later depending on what the data is… I do feel we have the flexibility to move," Fed Chairwoman Janet Yellen said.

"It is important for markets to understand that there is uncertainty and the statement is not some sort of firm promise about a particular amount of time."

Market fears were focused over whether the language used could have sent a signal that a rate hike would come as soon as six months later, CNBC reports.

"I know 'considerable time' sounds like it's a calendar assessment, but it is highly conditional and linked to the committee's assessment of the economy," said Ms Yellen.

"As I have said repeatedly, the decisions that the committee makes about what is the appropriate time to begin to raise its target for the federal funds rate will be data dependent," she added.

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