Fed maintains interest rates amid inflation concerns

Janet Yellen's last meeting as chair

The Federal Reserve decided to keep interest rates unchanged on Wednesday (31 January) and said inflation was likely to rise this year, bolstering market expectations borrowing costs will continue to climb in 2018.

Improved employment figures, increased household spending and capital investment are driving expectations at the central bank for the economy to expand at a moderate pace and the labour market to remain strong, according to Reuters. Rogoff: Rising interest rates could cause economy to 'unravel' In a statement following the two-day policy meeting, the Fed said "inflation on a 12-month basis is expected to move up this year and to stabilise" around its 2% target over the medium term. Policymakers at the Fed have been buoyed by signs in recent months that the economy is picking up spe...