Fed Scales Back Rate-Rise Forecasts as Global Risks Remain

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Why do we have to care so much about what a banking politburo has to say? Rates should be set by markets not gurus sitting in temples. It’s ridiculous if you think about it.

(From Bloomberg)

Federal Reserve officials held off from raising borrowing costs and scaled back forecasts for how high interest rates will rise this year, citing the potential impact from weaker global growth and financial-market turmoil on the U.S. economy.

The Federal Open Market Committee kept the target range for the benchmark federal funds rate at 0.25 percent to 0.5 percent, the central bank said in a statement Wednesday following a two-day meeting in Washington. The median of policy makers’ updated quarterly projections saw the rate at 0.875 percent at the end of 2016, implying two quarter-point increases this year, down from four forecast in December.

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