US Fed points to June rate rise

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The US Federal Reserve is likely to increase interest rates next month if the economic data supports such a move, the central bank’s latest minutes show.

It will look for signs the economy and employment is strengthening and inflation firming before taking action.

Policymakers, who last met in April, also suggested they thought investors had not fully accepted that such a move could come that soon.

The bank has kept interest rates between 0.25% and 0.5% since December.

The Fed minutes said recent economic data made them more confident inflation was moving up towards its 2% target.

Although recent figures showed the US economy only grew at a 0.5% rate in the first quarter – a two-year low – the Fed’s committee said that recent rises in employment suggested that would pick up.

They also said they were less concerned about a global economic slowdown although they did refer to the prospect of the UK leaving the EU as one that could upset markets.

The Fed kept its target overnight interest rate in the range of 0.25%-0.5%.

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