Fed leaves rates unchanged, Japan's leading index points down

To no one's surprise, the Federal Reserve left interest rates unchanged yesterday. Bloomberg reports:

The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and didn't budge from its conviction that inflation is the biggest risk facing the economy despite a yearlong slowdown.

"The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected," the Federal Open Market Committee said in a statement today after meeting in Washington. "Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth."

The FOMC statement is here. Mark Thoma at Economist's View points out the changes, of which there are in fact only two. The changes essentially update the statement to reflect the latest backward-looking data.

In other words, the FOMC statement adds nothing new.

Elsewhere, there were some forward-looking data on Japan yesterday. Bloomberg reports the latest reading for the leading index.

The leading index was 40 percent in March, the Cabinet Office said today in Tokyo, matching the median estimate of 22 economists surveyed by Bloomberg News. A number below 50 indicates the economy may cool in three to six months.

Earlier, the Conference Board's leading index for Japan had told a similar story.

The Conference Board reports today that the leading index for Japan decreased 0.2 percent and the coincident index decreased 0.2 percent in March...

With the decrease of 0.2 percent in March, the leading index now stands at 87.8 (1990=100). Based on revised data, this index decreased 0.1 percent in February and decreased 0.5 percent in January. During the six-month span through March, the index increased 0.3 percent, and four of the ten components advanced (diffusion index, six-month span equals 40.0 percent).