In Yellen's last meeting, Fed leaves interest rates unchanged
Feb 04 2018 by Cristina Jennings
The target range for the federal funds rate now is 1.25% to 1.5%.
Policy makers said they would continue to "carefully monitor" inflation as the Fed tries to meet its 2% target - the level it considers healthy for the USA economy. "They made enough room to go ahead and continue raising rates".
The accompanying statement hinted that the Fed will increase the benchmark rate at its next meeting, in late March, thanks to an improving economy and signs of inflation. In its previous statement, the Fed had predicted that inflation would remain below its target rate. "On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2%".
That change of language will fuel expectations that the U.S. central bank could raise the key lending rate more than the expected three times this year. The unemployment rate stood at 4.1% in December, and Fed officials do not expect it to fall much further.
Fed Governor Jerome Powell, tapped by President Donald Trump to replace Yellen, will be sworn in as chair on Monday, the Fed said in a statement. Leveraged trading is high risk and not suitable for all. It slumped to a five-week low at $1,047.00 in the previous session. Meanwhile, yields on Treasury notes moved higher.
There were no dissents in the Fed's decision on Wednesday.
Yields later retraced to just over 2.72% and the Dow, Nasdaq and the S&P 500 rebounded. Past performance does not guarantee future results. Many economists and Fed officials have said that wage inflation will precede broader increases in prices, so the committee is essentially signaling here that they sense the first rumblings of upward pressure that will take inflation to or past their 2% target in a consistent manner.
The central bank raised rates three times previous year and sees three additional hikes in 2018 even as it continues to trim its balance sheet on a largely pre-set schedule. But, in keeping with Fed's close-to-the-vest style of thinking, not a word was said.
Consumer prices rose 1.7% in the year ended December, according to the Fed's preferred inflation gauge. But Hong Kong's Hang Seng index dipped 0.1 percent to 32,843.20 and China's Shanghai Composite Index lost 0.9 percent to 3,449.93.
The Dow Jones Industrial average fell 241 points or 0.91 percent at the opening bell, its biggest opening gap-down in almost 16 years.
"They're not going to raise rates this time around".
"Everything is pointing to a more aggressive Fed this year", Zandi said.
The U.S. Fed kept its policy interest rates on hold today during its FOMC meeting, as was widely anticipated. And the Richmond Fed has a new president, Tom Barkin. They have used that language for the past year.