Fed leaves rates unchanged, will be ‘patient’ on future hikes
- The Fed said continued US economic and job growth were still ‘the most likely outcomes’
- It removed language from its December policy statement that projected ‘some further’ rate hikes would be appropriate in 2019
The Federal Reserve held interest rates steady on Wednesday but said it would be patient in lifting borrowing costs further this year as it pointed to rising uncertainty about the US economic outlook.
While the Fed said continued US economic and job growth were still “the most likely outcomes”, it removed language from its December policy statement that risks to the outlook were “roughly balanced” and struck language that projected “some further” rate hikes would be appropriate in 2019.
In a separate release from its policy statement, the US central bank also said while it was continuing its monthly balance sheet reduction, it was prepared to alter the pace “in light of economic and financial developments” in the future.
The Fed said in the same document that it had decided to continue managing policy with a system of “ample” reserves, a signal that its balance sheet rundown may end sooner than expected.
Taken together, the two documents were meant to convey maximum flexibility from a central bank buffeted in recent weeks by financial market volatility and signs of a global economic slowdown.