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US economic activity rising moderately - Fed

WASHINGTON, Aug 16 (KUNA) -- The US labor market has continued to strengthen and the economic activity has been "rising moderately so far this year," the Federal Reserve said Wednesday.
"Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined," according to the minutes of the Federal Open Market Committee (FOMC).
It said that on a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below two percent, while market-based measures of inflation compensation remain low.
The Committee expects that the economic activity will "expand at a moderate pace, and labor market conditions will strengthen somewhat further." It added that inflation on a 12-month basis is expected to remain somewhat below two percent in the near term but to stabilize around the Committee's two percent objective over the medium term.
"Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely," according to the minutes.
"In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and two percent inflation.
"The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal," FOMC stressed.
The Committee expects that economic conditions "will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run." "For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.
"The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated," it added. (end) si.gb