Thursday, 28 January 2016

Fed sees need to monitor market turmoil

The Federal Reserve tacitly aknowledged at its monetary policy meeting on Wednesday that the global market turmoil poses a risk to its outlook for the economy.

The Fed said in its statement after the meeting that it is “closely monitoring global economic and financial developments” while “assessing their implications for the labor market and inflation, and for the balance of risks to the outlook”.

The Fed left the target for its benchmark rate unchanged at 0.25 percent to 0.5 percent.

While some economists said the Fed statement makes an interest-rate hike at the next monetary policy meeting in March less likely, the dovish turn did not seem to encourage equity investors, as the S&P 500 fell 1.1 percent even though WTI oil rose 2.7 percent.

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