Jerome Powell, the new Fed Chairman, acknowledged the strength of the economy by revising the growth outlook higher for this year and the next in his first policy meet, but made a decision to stick to the central bank's earlier plan of three rate hikes this year. As widely expected, the central bank raised its benchmark lending rate by a quarter-percentage point to a range of 1.50% to 1.75%.
The Indonesian rupiah had appreciated 0.14 percent to IDR 13,742 per U.S. dollar by 13:50 pm local Jakarta time (Bloomberg Dollar Index), this is in line with the general trend as the United States dollar is on the defensive after the Federal Reserve turned out to be less hawkish than anticipated.
In its latest forecast, the Fed predicted the US would grow 2.7% this year and 2.4% next year - well above the 1.8% pace that the central bank views as consistent with stable inflation.
After Wednesday's announcement, the Chicago Mercantile Exchange's FedWatch website, which monitors trading on futures contracts tied to the central bank's benchmark rate, put the odds of a rate hike at the Fed's next meeting on May 2 at barely 5%. Further, the labour market remains strong (average 240,000 job gains in last three months) and unemployment stayed low (4.1 percent in February 2018).
The Fed, under Yellen, pursued gradual rate increases and a highly choreographed sell-off of the portfolio of bonds it bought to help prop up the economy after the 2008 financial crisis. The Fed's preferred inflation measure is forecast barely move up to 2.0% in 2019. For 2019, the growth rate has been revised higher to 2.4 per cent from 2.1 per cent projected earlier in December. The 2019 estimate rose to 2.4% from 2.1%.
The Federal Reserve is sticking to a cautious strategy on raising interest rates in 2018, but some officials left scattered hints they are more anxious about rising inflation than the central bank let on. In addition, they expect the level to reach 3.4% in 2020 compared to 3.1% in the December forecast.
Officials' growing optimism tracks with the expectations of many Wall Street analysts. "It could change up". But officials reported hearing worries from business leaders. However, for the next two years median fed funds rate path appears a bit steeper. "Today, with head winds shifting to tail winds, the reverse could hold true".
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The 6-year-old was all-in, playfully wrestling her pop for the bidding paddle and dominating the scene through sheer charm. She was honored for her humanitarian work at the Gala, alongside her mother-in-law Gloria Carter .
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He'll know the economy is changing when he sees it. In January, officials described economic activity and job growth as "solid".
In his first press conference as new chairman, Jerome Powell said the Fed is trying to stake out the "middle ground: Raising rates enough to keep inflation at bay without causing harm to the economy". Price gains are still expected to stabilize around the Fed's 2% target over the medium term, the FOMC said. USA core and headline inflation is expected at 1.9 per cent this year.
The dollar changed hands at 105.91 yen in early Asian trade, down from 106.04 yen late Wednesday in NY and 106.33 yen in Tokyo late Tuesday.
In a Nutshell: "The economic outlook has strengthened in recent months".
"Markets are saying that these tariffs are going to cut into the global growth story that looked pretty strong just a few weeks ago".
Information for this article was contributed by The Washington Post.