Stocks surged, bond yields fell and the dollar crumpled as the Fed sent an unexpectedly dovish message to markets, shaving the pace of anticipated rate hikes and warning that the economy still has issues.
“The key takeaway, the main and most obvious one is they took down their expectations for fed funds at the end of each of the next couple of years,” said David Ader, chief Treasury strategist at CRT Capital.
The Fed has indicated it will raise rates with the removal of the word “patient” from its statement, but it is also signaling it is not in a hurry to continue raising them. Besides downgrading rate increases, the central bank affirmed it expects inflation to ultimately reach 2 percent but it cut its near-term forecast.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.