The Fed’s Statement Was Short, but It Wasn’t Sweet
The FOMC takes a more-hawkish tone, indicates it won’t hesitate to raise rates if it sees signs of an overheating economy
By Justin Lahart
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Federal Reserve Chairman Jerome Powell speaks at a news conference Wednesday after the central bank raised a benchmark interest rate by a quarter percentage point. Photo: Andrew Harrer/Bloomberg News
Brevity might be the soul of wit, but investors might wish the Federal Reserve was a little more long-winded.
Fed policy makers on Wednesday raised their target range on the central bank’s benchmark short-term interest rate by a quarter percentage point while also boosting their projections for how much they will raise rates this year and next. Given what has been happening with the economy, these moves shouldn’t have counted as a big surprise. Fed policy makers now have a median projection that inflation will reach their 2% target by year-end. Their year-end forecast for the unemployment rate has shifted to 3.6% from 3.8%.
RATING GAME
Federal Reserve median projections for theyear-end federal-funds rate
Source: Federal Reserve
But what the Fed didn’t say seemed to have the biggest impact, initially helping to send stocks lower and short-term yields higher. It lopped off 80 words of longstanding language from its postmeeting statement which discussed how rates were “likely to remain, for some time, below levels that are expected to prevail in the longer run.” This amounted to policy makers saying they don’t expect to keep leaning with the economy, and that maybe they will need to start leaning against it.
Indeed, the Fed took one additional step toward that possibility Wednesday. Fed Chairman Jerome Powell announced that, starting next year, the central bank will hold a press conference following each of its policy meetings rather than after every other meeting as it now does. This will make it easier for the Fed to raise rates at any meeting, rather than just the four each year that are accompanied by news conferences.
What the Fed actually does will, of course, depend on the economy. What has changed, however, is that the Fed is no longer treating the economy as a fragile thing. If it thinks there is a risk of things running too hot, it isn’t going to hesitate much about raising rates to cool them down.
viernes, junio 15, 2018
THE FED´S STATEMENT WAS SHORT, BUT IT WASN´T SWEET / THE WALL STREET JOURNAL
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Etiquetas:
Interest Rates,
The Fed,
U.S. Economic And Political
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Estimados amigos,
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
Paulo Coelho
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
Paulo Coelho

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