By Isaac Cohen*
The words “can be patient” were seen as the most important statement contained in the press release, issued last week in Washington, at the conclusion of the Federal Reserve’s first meeting of 2015.
Analysts tried to clarify the answer to the question of when the central bank will begin the anticipated liftoff in US interest rates. Federal Reserve Chairwoman Janet Yellen, last December, said interest rate increases may start, depending on economic performance, after the next two meetings, scheduled for March and April. Therefore, this was interpreted as confirmation that liftoff may begin at the June 16-17 meeting.
In its January meeting, the central bank recognized the US economy is performing at a “solid pace,” with strong job gains which pushed down unemployment to 5.6 percent in December. However, the rate of inflation remains under the objective of 2 percent, expected by the Federal Reserve. As confirmed by the Labor Department, in 2014, the Consumer Price Index registered 0.8 percent, which together with the fall in oil prices and the strong dollar provide enough justification for the central bank’s patience.
Additionally, according to the Commerce Department, the US economy grew 2.4 percent in 2014, slightly above the potential growth rate of 2 percent.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.