SEB Research discusses its reaction to today's FOMC January policy statement.
"The Fed maintained the target range for the federal funds rate at 2.25 to 2.50 per cent as expected. The vote was unanimous and no revised forecasts were issued at this meeting. However, there were several changes to the wording of the statement. The Fed dropped the forward guidance sentence (“some further gradual increases”). Instead, the statement simply states that “In support of [maximum employment and price stability] the Committee decided to maintain the target range”," SEB notes.
"We recently revised our forecast and now predict only one rate hike in 2019. Today’s statement supports our assessment that the Fed is now on hold. We are sticking to our forecast that the central bank will deliver a final hike in June before clearer signs of economic slowdown will push the bank to the side-lines. The meeting minutes (to be published 20 February) should be an interesting read," SEB adds.