Monday, 28 May, 2018

Fed leaves interest rates unchanged

Fed Votes to Keep Interest Rates Unchanged, But a June Hike Is Likely US Federal Reserve Keeps Interest Rates Unchanged at 1.5 - 1.75 Range
Elsie Buchanan | 03 May, 2018, 10:21

The Fed also indicated that inflation has firmed, coming closer to the Fed's two percent target. In a statement it will issue Wednesday afternoon, the Fed is expected to leave its benchmark rate unchanged at a still-low level of 1.5 percent to 1.75 percent. But further increases could be delayed by the impact of President TrumpDonald John TrumpTop Trump trade official: "Any country or entity" exempt from tariffs will face quotas Pence in Arizona hails Arpaio as "champion" of "rule of law" Ex-Trump aide decries Senate Russia probe over high legal bills: report MORE's proposed tariffs among other obstacles.

The Fed had raised rates in March and now forecasts another two increases this year, although an increasing number of policymakers see three as possible. The White House argues that corporate tax cuts will lift productivity, permitting stronger growth without a pickup in inflation that might otherwise spur the Fed to raise rates at a faster pace. While US Treasury bond yields are rising today, this is having a limited impact on gold.

One explanation is that the recent data have been stronger than what may have been expected a few months ago.

"I think a June rate hike is a done deal unless something dramatically changes between now and June". "However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data".

The Fed also said risks to the economic outlook appear roughly balanced and reiterated its expectation that economic conditions will evolve in a manner that will warrant further gradual increases in interest rates.

Pamela Gidley, 'Twin Peaks: Fire Walk With Me' actress, dead at 52
The actress is survived by her mother, her brothers, and her nephews and nieces. "Love to her family", Jonathan Lipnicki wrote. I remember being in bed (I was 17) and hearing the radio come on saying that the Challenger had just exploded.


Oil prices were stable on Wednesday, supported by concerns that the United States may re-impose sanctions on major exporter Iran, although soaring US supplies capped gains. Likewise, maintaining its description of the inflation goal as "symmetric" - included in every FOMC statement since March 2017 - could reinforce the view that the Fed can be patient.

Last night the Fed acknowledged rising inflation, which...

The debate the Fed is now likely to have is whether it should accept a period in which inflation rises above 2 percent without accelerating its pace of rate increases.

Sluggish inflation stood in the way of quicker rate rises past year, but headline inflation has recently returned to the Fed's target of 2 per cent, leaving policymakers better placed to forge ahead with their rate-lifting plans. Average hourly earnings have remained below 3 percent throughout the economic recovery, most recently hovering around 2.7 percent, even as the unemployment rate has plunged to 4.1 percent.

The economy is now in its second-longest expansion since World War Two. "We've reached full employment, inflation has hit 2 percent".

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