Fed leaves policy unchanged; closely monitoring global developments

FXStreet (Córdoba) - The Federal Reserve announced it is leaving the federal funds target range at 0.25-0.50% after concluding its two-day policy meeting and offered few hints about further action at its March meeting.

While this decision was broadly expected the focus was in the statement. The FOMC reiterated that the economy is expected to warrant only gradual rate hikes, highlighting that the actual path of rates will remain data dependent.

The Fed referred to recent turbulence in markets and said they are “closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook.”

The Fed also removed reference in statement that risks to outlook for activity and labor market are balanced and also removed reference to 'reasonably confident' that inflation will rise near the target over the medium-term.