Interest rates hold steady, but increase ahead

WASHINGTON, March 18 (UPI) -- The Federal Open Market Committee is going to start considering hiking interest rates in future, though its unlikely to do so after its April meeting.

The FOMC dropped the word "patient" from its post-meeting statement, indicating that though the federal funds rate will remain between 0 and 1/4 percent, that could change in the future.

Still, Janet L. Yellen, chair of the Federal Reserve Board, emphasized the rate is likely to remain the same in the short term.

"Just because we removed the word patient from the statement doesn't mean we're going to be impatient," she said, though "such an increase could be warranted at any later meeting depending on how the economy evolves."

That doesn't necessarily mean a rate hike could come in June, "though we can't rule that out."

The decision to hike the rate would be based upon evaluation of economic conditions, including the unemployment rate and inflation.

The FOMC statement indicated "economic activity will expand at a moderate pace," with inflation gradually rising toward 2 percent. Additionally, Yellen said employment growth is favorable with nearly 290,000 jobs added per month for the past three months and the unemployment rate at 5.5. percent in February.

"It is important to recognize this is not a weak forecast," Yellen said. "Taking everything into account, we continue to project above trend growth ... we continue to project improvement in the labor market in 2015.

"We do see considerable underlying strength in the U.S. economy in spite of what looks like a weaker first quarter. We are projecting good performance for the economy."

After the release of the FOMC statement Wednesday afternoon, stocks rallied with the Dow gaining 244.38 for 1.37 percent, the NASDAQ was up 61.24 or 1.24 percent and the S&P 500 saw a 31.71 or 1.53 percent increase.