The Federal Reserve upgraded its assessment of the U.S. economy Wednesday but decided to skip another interest rate increase for now.
In a widely expected move, the central bank's policymaking Federal Open Market Committee voted unanimously to keep the target range for its benchmark rate at 1.75 percent to 2 percent.
However, the committee is widely expected to approve an increase at the September meeting and a tweak in the language from the post-meeting statement could be a nod toward more monetary policy normalization.
The statement said the labor market has "continued to strengthen," language consistent with the June meeting.
However, the committee went on to note that "economic activity has been rising at a strong rate," a more bullish view than the June characterization of "solid" growth.
In addition, the statement noted that household spending and business fixed investment have "grown strongly." That, too, is an improvement from June's characterization that household spending has "picked up."
The tweaks come days after the government said GDP grew at a 4.1 percent rate in the second quarter, the fastest in nearly four years. In addition, the unemployment rate is near a generational low at 4 percent, though manufacturing data released Wednesday pointed to concerns about the impact that tariffs would have on activity. The Fed statement made no mention of the tariff battle in which the U.S. is engaged with its global trading partners.
"It is going to be interesting to watch the Fed's communications between now and September, when we expect the central bank to deliver a third hike of 2018," James McCann, Aberdeen Standard Investments senior global economist, said in a note. Chairman Jerome Powell "has already attracted the ire of the President for raising rates. This political interference is clearly unhelpful but may return as September approaches."