WASHINGTON (AP) - The Federal Reserve said Wednesday near-term risks to the U.S. economy have diminished, reviving the prospect it will resume raising interest rates as soon as September.
The Fed noted the U.S. job market has rebounded, with robust hiring in June after a deep slump in May. At the same time, the Fed said in a statement after its latest policy meeting that it plans to closely monitor global economic threats and financial developments to ensure they don't slow the economy.
The Fed seemed to be referring in particular to Britain's vote last month to leave the European Union - a move that poses risks to the rest of Europe and to the global economy.
The central bank gave no specific timetable for when it might resume the rate hikes it began in December, when it raised its benchmark rate from a record low. But some analysts who had doubted the Fed would be ready to raise rates as soon as September said Wednesday's statement appeared to revive that possibility.
"The Fed is saying that near-term risks have diminished, so that certainly puts September back in play," said Brian Bethune, an economics professor at Tufts University.
Bethune said he still thought the Fed would wait until December before raising rates but a September move was possible if hiring remains strong and the global economy and markets remain stable.
Greg McBride, chief financial analyst at Bankrate.com, noted "the Fed gave a very upbeat assessment of the U.S. economy, which is the first step toward prepping markets for another rate hike."
Some also suggested the Fed's brighter outlook suggests it's become less concerned a British exit from the EU - commonly dubbed "Brexit" - would seriously undermine the U.S. or global economy.
The statement signals the Fed "does not think Brexit will be a significant hindrance for the U.S. economy," said Carl Tannenbaum, chief economist at Northern Trust.
Analysts said the next important signal of the Fed's thinking could come when Chair Janet Yellen speaks at an annual central bank conference in late August in Jackson Hole, Wyoming.
Stock averages posted a modest increase Wednesday after the statement was issued at 2 p.m. Eastern time, before drifting lower later in the afternoon.
The yield on the 10-year Treasury note dipped from 1.53 percent to 1.51 percent.
The decision to leave its key rate unchanged in a range of 0.25 percent to 0.5 percent was approved on a 9-1 vote. Esther George, the president of the Fed's Kansas City regional bank, dissented for the third time this year, arguing for an immediate quarter-point rate hike.
A few months ago, it was widely assumed the Fed would have resumed raising rates by now. But that was before the U.S. government issued the bleak May jobs report and Britain's vote last month to quit the EU triggered a brief investor panic.