The Federal Reserve has dropped its pledge to remain "patient" on raising interest rates, signalling a possible midyear Fed funds rate hike after over six years at the zero level.
The dropping of the key word from its policy statement on Wednesday at the end of a two-day meeting was a significant step away from its crisis-based monetary policy since 2008.
But a still cautious Fed noted that in fact US economic growth had "moderated somewhat" since January and the central bank marked down its growth forecast for this year by 0.3 percentage points to 2.3-2.7 per cent.
The Federal Open Market Committee, the Fed's policy arm, said that although the jobs market appeared to continue to strengthen, inflation was still weak, the housing sector was slow and export growth had slowed.
Despite the change in the language, the policy body stressed that it would not rush into a rate hike immediately.
"The Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting," it said.
"The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term."
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