Fed’s Evans Says CB Held Rates Due to More Risks to Economic Outlook

The Federal Reserve’s decision not to raise interest rates last week but to wait until it is more confident that inflation is headed towards the central bank’s 2-percent goal is “appropriate,” a top Fed official said on Tuesday.

Calling the Fed’s current strategy a “wait and see” approach, Chicago Fed President Charles Evans, one of the U.S. central bank’s most dovish policymakers, said the Fed held off raising rates because it saw more risks to the outlook in March than it had back in December. That was when it raised rates for the first time in nearly a decade and signaled it could raise rates four more times this year.

Last week, the Fed left its economic forecasts largely unchanged since December, but most policymakers said they expected just two rate hikes this year.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza