The US Federal Reserve decided to hold interest rates unchanged in January at 4.5%, in line with expectations.
The Fed statement does not include language that inflation had made progress toward the 2% objective, as it had in the December statement. Investors may see it as the rising 'inflationary risk' approach across the Federal Reserve members. Just after the decision, US500 was losing almost 0.6%.
According to the Fed statement
- Economic activity has continued to expand at a solid pace.
- Unemployment rate has stabilized at low level, labour market conditions remain solid; replacing reference in previous statement to conditions having eased.
- Risks to achieving employment and inflation goals are roughly in balance.
- Balance sheet run-off to continue at previous pace.
- Economic activity has continued to expand at a solid pace.
- Vote in favour of policy was unanimous.
- Fed is attentive to the risks to both sides of its dual mandate.
Source: xStation5
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