Post-Brexit the Fed says threats to the United States economy are declining

As expected, the Federal Reserve left the federal funds rate unchanged Wednesday for the fifth meeting in a row. They also hinted that standard overnight interest rate was left within a 0.25 to 0.50 percent range because inflation data hasn’t shown any significant change. But analysts said some market actors expected stronger signs of optimism in the Fed s statement.

The next FOMC meeting will be in late September, with two US employment reports between now and then, along with other data releases, such as second-quarter GDP. Originally, the Fed was expected to raise rates four times this year.

No rate hike for now, but expect at least one in 2016, or may be in September itself. And he said investors may not have to wait until September to know what the Fed is thinking. How a rate hike would help or hurt either candidate is beyond my comprehension (if you can figure it out, please tell me), but this Fed takes no chances on anything.

Although the Us stock market has closed with gains for four weeks in a row, Wall Street was on its toes this week with the Fed decision looming, and thus has been posting mixed closings in the first three days of trading.

Many policymakers have urged caution on raising rates as the country’s economy continues to recover. By maintaining a near-zero policy rate while economic growth is improving and the labor market is strengthening, the Fed faces the risk of eventual inflation or asset price bubbles.

Schiff further averred that the Fed is not the culprit of this year’s really.

Although mortgage rates are not directly tied to the action of the Fed and depend on the outlook for the economy and inflation, they are likely to remain low.

Despite several strong market signals, the FOMC said it believes the domestic economy is still too vulnerable to move rates beyond the 1/4 to 1/2 percent it established seven months ago.

When Britain did vote to leave the union and markets sank, some economists even suggested that the Fed’s next move might be to cut, rather than raise, rates.

The statement contrasted June’s jobs report with “weak growth in May”.

The new wording was viewed by some experts as a signal that the Fed could raise interest rate at its meeting on September 20-21. That would be bigger than earlier reports of a possible headline figure of around 20 trillion yen. “The good news is that overall economic growth will likely post a solid reading in the second-quarter on the back of solid consumer spending”. Business fixed investment, however, has been soft.

That was scaled back to two hikes this year after central bank policymakers issued new projections in which they also lowered their longer-term growth estimates for the USA economy. It has room to accelerate its rate increases if the economy were to heat up so much as to ignite inflation.

The Fed, however, said it will continue to closely monitor inflation in the USA and any new developments across the global economy and financial markets.