FYI: Proceeding cautiously in removing policy accommodation at this time will allow us to verify that the labour market is continuing to strengthen despite the risks from abroad.” (Janet Yellen, Fed Chair)
It was a big week in the markets. The FOMC met and elected to hold rates steady this month which was anticipated. What was unexpected was the Fed’s shift in thought that global financial pressures are now carrying an even larger presence than the risk of inflation. You can see in the chart below that the Fed did not change their outlook for core inflation, yet they told the markets to expect two interest rate increases rather than four in 2016. Why? Global financial worries
Regards,
Ted
http://dailyalts.com/the-caution-continues-to-be-global/
