Washington:  The US Federal Reserve decided to leave the target range for its benchmark interest rate unchanged at between 0 and 0.25 percent.

It also offered an optimistic assessment of the world’s biggest economy and hinted that a rate hike remains on the short-term horizon.

“The labour market continued to improve, with solid job gains and declining unemployment,” the Federal Open Market Committee, the US central bank’s rate-setting body, said in a statement on Wednesday at the close of a two-day meeting on monetary policy.

The US unemployment rate fell to 5.3 percent in June, its lowest since April 2008, shortly before the onset of the economic slowdown.

The economy continues to grow at a “moderate” clip, the Federal Reserve said, although it noted that the consumer price index edged up just 0.1 percent in the 12 months through June and that inflation remains below the Fed’s medium-term target of 2 percent.

The Federal Reserve has the dual mandate of promoting maximum employment and price stability.

The FOMC’s members, headed by the Fed chair Janet Yellen, voted unanimously on Wednesday to leave interest rates unchanged.

The FOMC gave no assurances that a long-awaited rate hike will occur at its next policy meeting in mid-September, saying it “anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labour market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term”.

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