Today, almost one hour ago, Fed Chairman Janet Yellen spoke about the Federal Open Market Committee’s decision to leave Federal Funds rates unchanged. The status of the American economy is not sound enough to justify a unanimous rates hike at this specific moment. Labor conditions have improved but not to a satisfactory level. Consumer spending has been sluggish, Retail Sales reported modest improvements. Inflation has not reached yet the target of 2%, although Oil price decline boosted consumer’s purchasing power. Fed Chairman sees in the forthcoming months moderate growth, and a modest but stable recovery. If the US economy will meet the Committee’s targets, the hike will come. The Financial Community warned against a premature rates increase, notably Christine Lagarde from IMF. Federal Reserve representatives see the second half of 2015 as most likely for a change in Monetary Policy. Bond prices have already started to adjust to possible inflation spikes, both in Continental Europe and US. American Equities have digested relatively well the news, reporting moderate daily gains.
Let’s see what the next Fed statement will tell us.