Published: Sat, February 03, 2018
Money | By Armando Alvarado

Fed leaves rate unchanged, expecting to meet inflation target

Fed leaves rate unchanged, expecting to meet inflation target

Global markets were mixed Thursday after the U.S. Federal Reserve left its benchmark interest rate unchanged and as investors monitored a raft of corporate earnings reports. Bostjancic said shortly after the Fed statement was released, that markets are pricing in a 65 percent chance of three rate hikes and a 28 percent chance of four increases this year. In its previous statement, the Fed had predicted that inflation would remain below its target rate.

Citing solid gains in employment, household spending and capital investment, the Fed said it expected the economy to expand at a moderate pace and the labor market to remain strong this year. Those additional rate hikes would likely lead, in time, to higher rates on some consumer and business loans.

Yellen was known for her dovish monetary policy and Powell has indicated he intends to continue in her footsteps. The consistent, and consistently inexplicable shortfall of inflation from the bank's 2% target amid all the economic improvement, has been the one area where the bank has fallen short on its own goals during the Yellen era. Four other slots rotate each year among the 11 other regional Fed bank presidents.

Charting out a path of more than three rate hikes wouldn't even be much of a surprise at this time, given the strengthening economy and uptick in inflation we've been seeing.

Mr. Powell, chosen by President Trump as her successor, has emphasized that he supports the Fed's current monetary policy of slowly unwinding its post-crisis economic stimulus campaign.

Evidence of Rohingya mass graves uncovered
Senior military officials, border guard forces and local administrators were due to visit the village on February 2. Over 680,000 Rohingya Muslim refugees have fled Burma since the latest wave of clashes began on Aug 25.

The Dow Jones Industrial Average increased 73.74 points, or 0.28 percent, to 26,150.63, the S&P 500 earned 1.47 points, or 0.05 percent, to 2,823.9 and the Nasdaq Composite gained 9.00 points, or 0.12 percent, to 7,411.48. Synchronized growth in major regions across the global economy has helped energize the us economy. And the sweeping tax overhaul that Trump pushed through Congress last month is expected to further support USA growth.

Jerome Powell, who was recently confirmed as the next Fed chairby the Senate, will begin leading the Fed at the meeting scheduled for March 20-21.

But investors expect the first move will come at the Fed's next meeting in March.

The committee most recently raised rates by 25 basis points in their December 2017 meeting. The pivotal factor will likely be how inflation performs.

January sales of US Mint American Eagle gold coins fell 50 percent from the same month a year earlier, the slowest January sales in 10 years, and January silver coin sales fell to the lowest since 2009, government data showed on Wednesday. Many indicators are great: unemployment is low, inflation is low, gas prices are steady, 401Ks are cranking. Markets are giving the Fed the green light to raise rates.

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