The minutes of the April meeting of the US Federal Reserve (Fed) show that the central bank is unlikely to raise interest rates in June while leaving open the option to tighten later in the year.

The minutes also confirmed that the Fed expects growth to pick up after stalling in the first quarter, even as officials worried about the strength of the consumer spending that makes up two-thirds of the economy.

Bond yields fell as some investors pushed back expectations for a rate increase beyond the September meeting.

In the first quarter of this year, GDP rose at an annual rate of just 0.2 per cent versus a growth rate of 2.2 per cent in the fourth quarter of 2014.

In the meantime the eurozone economy lost growth momentum for a second consecutive month in May due to weak performance by the German economy.

The Purchasing Managers’ Index (PMI) dropped to 53.4 in May from 53.9 in April, initial data from Markit Economics showed last week. The reading was expected to remain unchanged at 53.9.

The average score for the second quarter so far points to GDP growth similar to the 0.4 per cent expansion seen in the first quarter of the year, according to Chris Williamson, chief economist at Markit.

This suggests that the region is on course to expand by around two per cent this year, which would be the best performance since 2010, he noted.

Faster expansion in manufacturing was offset by a slowdown in services, although the pace in services merely eased slightly from March’s eight-month high.

Finally, minutes of the Monetary Policy Committee’s May meeting showed that all nine members voted to keep rates at a record low of 0.5 per cent.

But they were split on the risk that falling unemployment would trigger faster wage growth, which could stoke a bigger pick-up in inflation than expected.

The minutes said that inflation was likely to remain close to zero in the very near term, reflecting drops in food, energy and other prices. However, house prices could face “upside risks” in the second half of the year.

This report was compiled by Bank of Valletta for general information purposes only.