The US Federal Reserve Bank’s two-day FOMC meeting concluded yesterday with the central bank releasing a statement on the monetary policy. There were no changes to the Fed’s short-term Fed funds rate which remain in the range of 0.75% – 1.0%.
Fed officials left the benchmark interest rates unchanged and noted that the recent slow pace of economic activity in the first quarter was “transitory,” and focused instead on the continued strength in the labor market and business spending.
As a result, the central bank maintained its view that a rate hike in June is on the table, which all but diminished after the weak March payrolls report and a rather soft GDP growth in the first quarter of the year.
“The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term,” the FOMC statement showed.
Immediately following the Fed’s statement, the rate hike odds for June rose to 71.6% which was a modest increase in expectations from 67% prior to the event, according to the CME Group’s rate hike probability tool.
Read more: https://www.orbex.com/blog/2017/05/fed-stays-hawkish-june-rate-hike-expectations-remain-table/