WASHINGTON (12/17/14, UPDATED 2:25 p.m. ET)--The Federal Open Market Committee (FOMC) left the words "considerable time" in its policy statement today, potentially signaling that the Federal Reserve may raise short-term interest rates later than currently anticipated.
Analysts have said that removing the words from the statement would have indicated that the FOMC was planning to raise rates sooner, but the Fed said that keeping rates at their near-zero levels remained appropriate.
"In determining how long to maintain this target range, the committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2% inflation," said the FOMC in its statement following the conclusion of its two-day policy meeting. "Based on its current assessment, the committee judges that it can be patient in beginning to normalize the stance of monetary policy.
"The committee sees this guidance as consistent with its previous statement, that it likely will be appropriate to maintain the 0% to 0.25% target range for the federal funds rate for a considerable time following the end of its asset-purchase program in October, especially if projected inflation continues to run below the committee's 2% longer-run goal."
The Fed added, however, that if incoming economic data points to faster economic progress, the committee may then hike interest rates sooner than they presently expect.
In assessing the overall economy, the Fed noted that the labor market continues to make improvements, with solid job gains and a lower unemployment rate recorded of late. Further, household spending continues to climb and business fixed investment is rising as well.
The housing market continues to make slow progress, though.
"The committee sees the risks to the outlook for economic activity and the labor market as nearly balanced," the FOMC said. "The committee expects inflation to rise gradually toward 2% as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate."