The committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.
Inflation excluding food and energy prices slowed for a second month in May, and an easing of pressures in the labor market reduced concern that prices would rise faster than the inflation target in the medium term.
The Fed made clear that it sees plenty of room to cut rates further if necessary without risking a destabilizing surge in wages and prices, noting that an "easing of pressures on labor and product markets is expected to keep inflation contained".
"The committee expects inflation to moderate in coming quarters, reflecting a projected leveling out of energy and other commodity prices and an easing of pressures on resource utilization," said the report, while cautioning, "Uncertainty about the inflation outlook remains high".
The Russian rouble, which collapsed last year in the face of western sanctions on Moscow and falling oil prices, rebounded sharply on the news of the ceasefire and hopes that a de-escalation of the conflict may signal the lifting of sanctions and an easing of the pressure on Russia's reeling economy.
At the same time, in a region that had resisted an economic downturn because it was less dependent on manufacturing jobs than much of the country and in which home prices continued to rise for years, some economists contended that an easing of price pressure might not be such a bad thing, might eventually spur sales volume.
At their October meeting, Federal Reserve policy makers unanimously approved leaving the overnight bank lending rate unchanged because of slowing economic demand and an easing of inflation pressures.
"When you have significant numbers of people give up, that have sold their stock, that are out of the market, you really begin to see an easing of the selling pressure," Mr. Keithler said.
