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US Federal Reserve meet: Top 5 key takeaways after Janet Yellen leaves rates unchanged

Thu March 17 2016, 12:29 pm
  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    The Janet Yellen led US Federal Reserve left interest rates unchanged on Wednesday and indicated that moderate US economic growth and 'strong job gains' would allow it to tighten policy this year, with fresh projections showing policymakers expected as many as 2 quarter-point hikes by the year's end, half the number seen in December. The US central bank, however, noted that the United States continues to face risks from an uncertain global economy. With what happens in the US economy being of extreme importance for the entire world, here are top 5 key takeaways from the meet: (AP)

  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    1. US Federal Reserve policymakers urging caution over interest rate hikes have gained the upper hand in the central bank's internal debate, but the risk for the US economy is that they are wrong to downplay a recent rise in inflation. In words that echo those of colleagues on the US Fed's dovish wing, Fed Chair Janet Yellen said on Wednesday that 'caution is appropriate' when it comes to raising interest rates. She said she was not convinced underlying inflation had accelerated. (AP)

  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    2. If Janet Yellen is right, financial markets have ample warning for the gradual pace of rate hikes she said was likely. But many private economists buy into the argument by an opposing faction within the US Federal Reserve that US inflation is indeed stirring. They point to a range of recent data to back their view, including a reading Thursday showing underlying US inflation rose 2.3 percent in the 12 months through February, the biggest increase in more than three years. The Fed's target is 2-percent inflation. (AP)

  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    3. Faster price gains would likely trigger more aggressive rate hikes which Janet Yellen in the past has warned could cause a recession. "If we got to a point where the Fed had to raise (rates) quickly, it could be very destabilizing," said Northern Trust economist Carl Tannenbaum, formerly an economist at the Chicago Fed. (AP)

  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    4. Janet Yellen's comments sounded much like those of a vocal faction of US Federal Reserve policymakers, led by Governor Lael Brainard, who have argued publicly that the global economic slowdown could knock the U.S. economy off course. Brainard just last week counseled against assuming that a tighter labor market would boost inflation. (AP)

  • US FED, us fed rate, us fed rate meet, us fed rate unchanged, janet yellen, janet yellen us fed, us fed rate unchanged today, janet yellen us fed rate

    5. After US Federal Reserve's decision and fresh forecasts from the it that showed most officials prefer just two rate hikes this year, investors and economists dialed back their own rate hike expectations, with traders of interest-rate futures now seeing no rate rise before September. But overall the US Fed's message remained one of patience, even in the face of unemployment at near-normal 4.9 percent and signs of inflation creeping up. And that suggests that for now, the camp within the Fed advocating a go-slow approach on rate hikes has won the day. (AP)

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