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No predefined policy path
The impact of uncertain hikes may take a year or more to see
Progressive rhythm to balance the risks of too fast or too slowly
Interest rates remain low by historical standards
Incremental increases balance risks with expectations
A lot to like about the US economic outlook
Expects solid growth in the United States, low employment rate and inflation close to the goal
Pay close attention to the data
Concerned about corporate debt, which could exacerbate the economic downturn
No dangerous excesses on the stock market
The US dollar is hurt at the comment "just below" and without a predefined path.
Complete quote:
"Although the FOMC participants' projections are based on our best estimates of the outlook, there is no predefined political path, and we will pay special attention to what new economic and financial data tell us."
Another key line:
"So we have begun to gradually raise our key rate to reach more normal levels in a healthy economy, interest rates are still low by historic standards and they remain just below the broad range of interest rates." 39, estimates of the level that would be neutral for the economy ie, not to accelerate nor slow down growth. "
As you can see in the market, it's dovish. Definitely more dovish than expected. His references to gradual hikes are usually in the past.
"Our progressive pace of rising interest rates has been a risk balancing exercise."
"Our gradual increase trajectory has been designed to balance these two risks."
"So we started increasing our policy rate gradually to reach more normal levels in a healthy economy."
"We also know that the economic effects of our gradual rate increases are uncertain and may take a year or more to fully realize."
Perhaps just as important is that it hardly mentions the progressive pace. These are the only references.
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