NEW YORK (AA) – The Federal Reserve left its benchmark interest rate unchanged Wednesday during its much anticipated June meeting.
The Federal Open Market Committee (FOMC) said in an official statement that "only gradual increases" in interest rate will appear if economic conditions evolve, depending on incoming data that favors domestic growth.
"Although the unemployment rate has declined, job gains have diminished," the FOMC said in a statement.
With the economy adding just 38,000 new jobs in May, its fewest since September 2010, the unemployment rate surprisingly fell to 4.7 percent, from 5 percent the previous month.
The committee projects an unemployment rate of 4.6 percent for this year and the next, Fed Chair Janet Yellen said at a press conference immediately after the release of the FOMC statement.
Although the bank has a target of 2 percent inflation, it extended its forecast on its statement.
"Inflation is expected to rise to the 2 percent target by the end of 2018," Yellen said.
"The committee continues to closely monitor inflation indicators and global economic and financial developments," she added.
One global factor is the vote in the U.K. later this month on whether Great Britain will exit the European Union.
“It was one of the factors in today’s decision,” Yellen said. “Brexit could have an impact on the U.S. economy.”
The Fed considers a possible Brexit and global economic slowdown as risks to the well-being of the U.S. economy and the group is being cautious about any rate hike.
Experts believe more than a rate hike is possible in July, September or December this year.
The last time the Fed increased its benchmark interest rate was December.