#XMINDO_FX - Markets June 19 The U.S Dollar weakened against major rivals on Wednesday, as the Federal Reserve announced its policy decision and economic outlook as the central bank winds down monetary stimulus. The Federal Open Market Committee trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year. Fed Chair Yellen said in her speech yesterday that the Fed is likely to “reduce the pace of asset purchases in further measured steps” and that it expects interest rates to stay low for a “considerable time” after the buying ends. She declined to offer a more specific timetable for the first interest-rate increase since 2006, saying there’s “no mechanical formula.” The Fed said growth is bouncing back and the job market is improving as it continued to reduce the monthly pace of asset purchases. Fed officials also released a new set of quarterly forecasts,predicting that the benchmark interest rate will rise more rapidly once officials decide to increase it above zero sometime next year. Federal Reserve officials predicted their target interest rate will be 1.13% at the end of 2015 and 2.5% a year later, higher than previously forecast. They lowered their long-run estimated rate, reflecting a slower growth rate for the U.S. economy. Most Federal Open Market Committee participants reiterated their view that the Fed will refrain from raising its benchmark rate until 2015. Fed trimmed its growth forecast for 2014 because of the weak report on gross domestic product for the first quarter. But that weakness did not cause any revisions to the stronger growth of above 3% in 2015. The Fed also trimmed its forecast for unemployment, but officials did not materially change their forecast for inflation despite some higher-than-expected inflation data over the past three months. Inflation would stay at or below 2% through 2016. The Dollar Index, which tracks the performance of the U.S Dollar other major currencies, was down 0.248% at 80.400. xmindofx/market-news
Posted on: Thu, 19 Jun 2014 18:06:55 +0000
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