The Federal Open Market Committee finished its two day policy meeting this afternoon and left rates unchanged. This was widely expected as it is not a “live” meeting since it does not have a press conference scheduled. The most important word inserted in the document is “symmetric” as the FOMC referred to the near 2% core CPE (real inflation rate). This suggests that the FOMC shall remain accommodative. Over the past years, inflation continued to run below 2%. Now that the core PCE (the favored FOMC inflation indicator) is at 1.9% (March 2018), the FOMC does not intend to increase its pace for rate increases in case this speedy action may choke off the recovery. Allowing the economy and inflation to run a bit hotter helps to maintain price stability. This basically suggests that the FOMC does not intend to be trigger happy with rates at this time and will continue its measured pace.
Here is our language change comparison to the March 2018 press release.