Fed Leaves Rates Unchanged
The Fed decided to leave rates unchanged, as expected, and noted that near-term risks to the economic outlook appear roughly balanced, but policymakers are keeping an eye on inflation, which has been slow to pick up despite a tightening of the labor market.
Fed officials expect that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong.
The CME FedWatch Tool points to the March FOMC meeting as the mostly likely time for the next rate-hike announcement with an implied probability of 86.1%, up from 74.7% yesterday.
The 2-yr yield hasn’t moved since the FOMC release, staying at 2.14%, while the 10-yr yield has ticked up to 2.74% from 2.73%.