US Fed officials see progress but won’t raise interest rates

Economists and market analysts are closely tracking the question of when the US Federal Reserve might begin to reduce its $120bn in monthly purchases of Treasurys and mortgage-backed securities since the Fed is expected to take that step before raising interest rates.

Federal Reserve officials were encouraged last month by evidence the United States economy was picking up, but they showed no sign of moving closer to ending their bond purchases or lifting their benchmark short-term interest rate from nearly zero. Fed policymakers also said they expect inflation will likely rise in the next few months because of supply bottlenecks, but they believe it will remain near their 2 percent target over the longer run. “It would likely be some time until substantial further progress toward” the Fed’s goals of maximum employment and inflation at 2 percent are reached, and “asset purchases would continue at least at the current pace until then,” the Fed said in minutes taken during its March 16-17 meeting. The minutes were released Wednesday after the customary three-week lag.