Following the Fed’s announcement, please see below for market views from the Global Fixed Income, Currency & Commodities Team (GFICC):
Consistent with our and the market’s expectations, the Federal Open Market Committee (FOMC) maintained the Fed Funds rate range of 1.50%‐1.75%. This meeting was not accompanied by a press conference or forecast updates.
The May statement was updated to match the recent growth and inflation data released over the intra-meeting period. The Committee maintains an upbeat view of the medium term outlook while acknowledging the recent slowdown in personal consumption as well as the continued strength from real business fixed investment. The Committee acknowledged improvements in inflation and the expected strong path over the next few months, but specifically emphasized symmetry around its objective. The FOMC continues to characterize the path of future rate hikes as gradual. The Fed statement did not reference the balance sheet but the process will continue in the background. In May, the maximum run-off per month will continue at a pace of $30bln per month ($18bln Treasury/$12bln MBS).
We can break the statement into three parts:
There were no dissenters.