The FOMC, as expected, did not make any changes to policy, such as raising interest rates from current rock-bottom levels. However, the tone of the statement was a bit more neutral towards the subject, compared to the accommodative language seen in recent years.
Much of the discussion surrounded whether or not the FOMC would remove the key word ‘patient’ from the official statement. As was the case a decade ago when Chairman Greenspan did this, the change implies a rate hike could be appropriate at any upcoming time the committee chooses. Of course, there’s a lot of nuanced semantics here and the Fed remains careful to avoid a misinterpretation or misstep. April was downplayed as a possible jumping off point for rates, but this entire process as of late has been data-dependent, so could be June or a bit later. They’ve acknowledged the ‘moderating’ of conditions recently, and weakness in housing, but also the strength in labor growth and potential tailwind from lower oil prices. (Markets turned around in a positive direction upon hearing the moderating language.)
Looking at the mandate dashboard: Continue reading
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