Fed Keeps Rates Same, Changes Inflation Language

By: Tho Bishop

The FOMC announced that they will leave interest rates unchanged today, as was expected.

What was noteworthy about the Fed’s announcement was a changes made to language about inflation. 

The significance here is that it indicates the Fed is not concerned with short-term inflation rates above 2%, as we’ve seen in recent months. (The Fed’s other inflation measure, “Underlying Inflation,” has been over 3% – a 12 year high – since last month.) The Fed is hoping to continue with it’s slow, steady, increase in interest rates to the rest of the year.

The question is how will the Powell Fed respond act if interest rates continue to creep upwards?

Powered by WPeMatico