WASHINGTON—The Federal Reserve pledged to support the economic recovery by setting a higher bar to raise interest rates and by signaling it expected to hold rates near zero for at least three more years.
In new projections released Wednesday after a two-day policy meeting, all 17 officials who participated said they expect to keep rates near zero at least through next year, and 13 projected rates would stay there through 2023.
The Fed’s rate-setting committee also revised its postmeeting statement to specify it would maintain rates near zero until it sees evidence of a tight labor market and inflation reaches 2% “and is on track to moderately exceed 2% for some time.”
“They set an enormously high bar to raise rates here. That’s the bottom line,” said Roberto Perli, a former Fed economist who is now at research firm Cornerstone Macro.
U.S. stock gains slipped away Wednesday afternoon. The S&P 500 fell 0.5% as of the 4 p.m. close of trading in New York. The yield on the benchmark 10-year U.S. Treasury was little changed, ticking up to 0.686%, from 0.678%. After topsy-turvy trading in recent days, the major U.S. stock indexes are all down so far this month.
Read More: Fed Sets Higher Hurdles for Rate Increase