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WSJ: Federal Reserve Won’t Raise Rates Today

According to a Wall Street Journal report, the Federal Reserve almost certainly won’t lift the benchmark fed funds rate at the conclusion of today’s meeting — but it could tip its hand about future potential raises.

That’s the overriding message after reading the tea leaves of the Fed’s recent actions. From the WSJ:

The Federal Reserve is almost certain to hold short-term interest rates steady at its two-day policy meeting that concludes Wednesday. Chairwoman Janet Yellen doesn’t hold a press conference after this gathering, and the central bank doesn’t release new economic projections, so all eyes will be on the postmeeting policy statement to be released at 2 p.m. EST. The statement could provide insight into officials’ thinking about how soon they might raise rates again and how much they expect to move them this year. Here’s what to watch.

Yellen has said the cabal would seek to boost rates “a few times a year” through 2019, should the economy progress as expected. However, given the changing administration and so much uncertainty about how Trump’s initiatives will play out, it may be more prudent to keep rates as is for the rest of the year.

That course would be in-line with the Fed’s last two raises, which came in December 2015 and 2016, respectively.

Other potential talking points stemming from the two-day meeting could include reducing the Fed’s massive $4.5 trillion balance sheet, inflation concerns based on new Trump policies, and some mention of the Fed’s new voters, which are set to take a seat at the table later this year.

The iShares Barclays Aggregate Bond Fund (NYSE:AGG) was trading at $107.81 per share on Wednesday morning, down $0.26 (-0.24%). Year-to-date, AGG has declined -0.23%, versus a 2.20% rise in the benchmark S&P 500 index during the same period.

AGG currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #13 of 28 ETFs in the Intermediate-Term Bond ETFs category.

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