Federal Reserve policymakers on Wednesday held a key interest rate steady, downplaying recent weak economic data and indicating they remained on track for two more rate hikes this year.
While the USA central bank's decision to maintain its benchmark rate at a target range of 0.75%-1% was largely expected, the statement accompanying the decision was being closely watched for hints on its next move.
Before the Fed statement, the major indexes were all in the red, with the Nasdaq leading the way lower on the stock market today after a mixed earnings report from Apple (AAPL). I think that signals that the Fed is looking past some of the soft data as likely being either weather related or seasonal or consistent with the trend that we've seen over the years of a surprisingly weak first quarter and typically an improvement in the economy in subsequent quarters. The Fed's thinking has been that reducing the balance sheet could send long-term rates up and work against its goals of fortifying the economy. "With no change in monetary policy, mortgage rates look to remain within the narrow band of four percent to 4.5 percent for the foreseeable future", said National Association of Realtors (NAR) Chief Economist Lawrence Yun. Most Fed officials had anticipated that the central bank was likely to reduce its 4.5 trillion dollars of balance sheet later this year, if the economy continued to perform as expected, according to minutes of the Fed's last policy meeting in March.
Meanwhile, a strong non-farm payrolls report on Friday would give the markets more confidence that the Fed will stay on course for another two rate increases this year.
"In the meantime, we see investors going with this tightening mood and favouring exposures benefitting from a hike such as floating rate notes". They also took the market by surprise by completely overlooking the latest fairly underwhelming nonfarm payrolls number, reiterating that the labour market in the U.S. is continuing to strengthen.
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It was added that the forward did not require a scan and that Coutinho himself was in good spirits after the match. The German worldwide broke the deadlock in first-half stoppage time with a stunning volley.
Ryan Sweet, senior economist at Moody's Analytics, said: "The Fed is communicating its mantra of gradual rate hikes".
Companies continued to hire at the start of 2017, averaging 178,000 net new jobs a month in the first quarter, and wage growth has begun to move up, suggesting tightness in the labor market.
Ahead of the release, investors saw about a 70 percent chance of a rate increase at or by the Fed's June meeting, based on trading in fed funds futures. Those odds are in line with their view.
Central bankers provided little direction on when they might next change the policy rate, giving themselves flexibility to raise or hold at their June meeting.
"It was a pure marking-to-market of things that were". Instead, the FOMC committee issued a boilerplate Press Release that the first quarter slowdown is transitory and that inflation expectations are balanced.
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