INSUBCONTINENT EXCLUSIVE:
Authors: JordanFederal Reserve officials made doubly sure to convey a relaxed attitude toward inflation rising above 2 per cent, mentioning
react more severely if inflation is above its target rather than below
While leaving rates unchanged as expected at the conclusion of its two-day meeting in Washington on Wednesday, it added a second reference
said Guy Lebas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia
almost every month since April 2012
medium term.
That combination of commentary should quash any suspicion that Fed officials might react to the recent bump in inflation by
speeding up their gradual pace of interest-rate increases
The Fed lifted its benchmark rate three times last year and began to slowly trim its balance sheet
chief global strategist at Nikko Asset Management in New York.
Investors see a second move this year in June followed by at least one more
hike in 2018, according to pricing in interest rate futures contracts.
Fed officials otherwise acknowledged recent economic developments,
noting a modest slowdown in household spending in the first quarter, but also mentioning the impressive recent pace of business investment
and the still-strong labor market
repeating language that it introduced in January.
The yield on 10-year US Treasury notes was little changed at 2.97 per cent at 5:06 pm in
New York, while the SP 500 Index of US stocks closed down slightly on the day.
The decision to maintain the federal funds target range at
1.5 per cent to 1.75 per cent was a unanimous 8-0.
