As widely expected, the FED (and Janet Yellen's last rate decision) left interest rate unchanged at 1.25
Just like in Dec'17, the FED repeated that the labor market has continued to strengthen.. .gains in employment, household spending and business fixed income have been solid...
On outlook for monetary policy, the FED added the word “further” and argues that they expects the economy to evolve in a manner “that will warrant further gradual increases in the federal funds rate”.
Following that statement, the USD gained some ground against the EUR and yields rose a bit, suggesting that markets interpreted the statement as hawkish.
The changes in wording on inflation and the monetary policy outlook sets the stage for a March hike and also suggests that the Fed is ready to hike more than 3 times (March, June, September, & December) in 2018 and possibility for a faster pace of FED tightening has also grown stronger.
Will all that come to pass in 2018?.....well, only time will tell.
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