Fed Leaves Rates Unchanged, With Hike Seen Next Month.
Thursday, May 3, 2018
Posted by: Alyce Ryan
AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Manufacturing Economic Daily Newsletter” from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).
USA Today (5/2, Davidson) reports the Federal Reserve “held its key interest rate steady Wednesday but noted that inflation has climbed close to its 2% goal, paving the way for another rate hike in June.” The New York Times (5/2, Tankersley, Subscription Publication) portrays Fed policymakers as “acknowledging rising inflation but providing little indication” they “are worried about a sudden, rapid escalation in prices or an abrupt slowdown in economic growth that could alter its gradual pace of rate increases.” Bloomberg News (5/2, Condon) notes “the decision to maintain the federal funds target range at 1.5 percent to 1.75 percent was a unanimous 8-0.”
The Wall Street Journal (5/2, Timiraos, Subscription Publication) says in its statement, the Fed provided nothing to dispel market expectations that it would hike rates again next month. The AP (5/2, Crutsinger) quotes the Fed as saying, “Inflation on a 12-month basis is expected to run near the committee’s symmetric 2 percent objective over the medium term.” The piece explains that the “use of ‘symmetric’ suggests that Fed officials might be willing to let inflation run slightly above its 2 percent target for some time, given that inflation has run below the target for six years.” Reuters (5/2) reports officials “also downplayed a recent slowdown in economic and job growth, saying activity had been expanding at a moderate rate and job gains, on average, had been strong in recent months.”
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