Germany’s 10-year is back below zero

While hailing a pickup in activity since the sluggish first half of the year, the USA central bank showed uncertainty about some persistent weak signs in the economy, and cut its 2016 growth forecast to 1.8 percent, down from 2.0 percent in June.

The Fed has held its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent since December, when it raised borrowing costs for the first time in almost a decade.

After not making a rate hike at its last six meetings, the bank’s credibility is under scrutiny after investors and experts anticipated as much as four rate hikes in 2016.

But three members of the Fed’s 10-member policymaking committee voted to raise the benchmark rate, and most Fed officials said separately that they still expect to raise the rate once before the end of the year.

Editor’s Note: The article was updated to include comments from Fed Chair Janet Yellen.

Reports said an estimated $14 billion USA of cargo was trapped on Hanjin ships, following the company’s collapse late last month.

After the Fed’s statement, traders were betting on a 63-percent chance of a December rate increase, up from 58 percent just before the statement, according to the FedWatch website.

It is unlikely the US Fed would hike rates in November, partly because of the US presidential election.

She expects a rate hike in December “barring significant deterioration” in the data or big external shocks. “The economy has a little bit more room to run than we thought, which is good”.

“The focus of the market is shifting from the Fed rate decision to the near-term outlook for rate hikes”, HSBC’s James Steel said.

The yen strengthened on Wednesday (Sep 21) despite the Bank of Japan’s effort to hammer it down with new long bond yield targets.

The Federal Reserve kept its benchmark interest rate unchanged for the sixth straight meeting Wednesday, saying it needs to see a bit more sign of strength in the U.S. economy.

“There was nonetheless something for both the hawks and doves, providing the USA central bank with enough wiggle room to swerve a pre-Christmas hike if necessary”, they added.

German 10-year bond yields fell nearly 5 basis points to minus 0.040 percent, their lowest level in nearly two weeks. The New Zealand dollar edged lower after the Reserve Bank of New Zealand (RBNZ) left the door wide open for another interest rate cut this year. Fed officials said they expected that economic growth would not exceed 2 percent over the next three years.

The decision to stick to the easy money policy came hours after the Bank of Japan overhauled its own stimulus programme to target inflation and held off cutting interest rates further into negative territory.

I have no concern that the Fed is politically motivated and I will assure you that you will not find any signs of political motivation when the transcripts are released in five years.

Investors did not appear to significantly shift their bets on the timing of the next rate hike.