Fed seen holding rates this week with hike still on horizon...

Reuters
April 24, 2016

U.S. Federal Reserve policymakers are expected to hold interest rates steady when they meet this week, but may tweak their description of the economic outlook to reflect more benign conditions, leaving the path open for future rate rises. 

The Fed raised its policy interest rate last December for the first time in a decade when market volatility finally subsided in the wake of a scare over China’s economy.

Similarly early this year markets wobbled on worries about a slowdown in global economic growth and weak U.S. corporate earnings, leading to expectations for further Fed rates rises to be revised down, so Fed policymakers may be wary of this week sending too strong a message of an imminent policy tightening.

Many Fed officials remain spooked by the steep stock market drop earlier this year and by weak first-quarter U.S. economic data. Concrete signs of higher inflation and growth may be needed before the FOMC, the Fed’s policy committee, continues with the projected gradual path toward more normal levels of interest rates.

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