That June rate hike the Fed has been promising (threatening?) for months now? Yesterday’s recession-y GDP report has taken that off the table:
The Fed now needs time to make sure its expectation of a rebound proves correct after a spate of soft economic data. That means the chances a rate increase by midyear have diminished, a point underscored by the Fed’s statement released Wednesday after a two-day policy meeting.
“Economic growth slowed during the winter months, in part reflecting transitory factors,” the Fed said. The Fed also said that although growth and employment had slowed officials expected a return to a modest pace of growth and job market improvement, “with appropriate policy accommodation.”
“Transitory factors” again, eh? Janet Yellen has become the Roseanne Roseannadanna of central banking: “It’s always something.”