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Market Reacts To Fed Halt

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Market Reacts To Fed Halt

On Wednesday, June 15th, the Federal Reserve came out and said that they will not raise interest rates.

The decision was predictable after the disappointing May jobs report

Additionally, the Fed changed their forecast for U.S. economic growth in 2016.

They originally had it set at 2.2%, but have since dropped it down to 2%. 

Janet Yellen cited, “headwinds blowing on the economy” as the reasoning behind the negative outlook.

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This isn’t the first time the Fed has reduced their expectations for U.S. economic growth. 

In December, their projection were set at 2.4%, and they have also decreased their predictions for economic growth going into 2017.

Any decision the Fed makes about interest rates greatly effects not only all Americans, but the global economy as a whole.

Mortgage rates will increase, any debt on credit cards or car loans becomes more expensive, and saving accounts will begin earning extra interest as a rate hike is an indication that the economy is healthier

The central bank has upped its inflation estimation, putting it at 1.4% when it had previously gone down to 1.2% in March.

The Fed will meet again in July, but any movement on interest rates are not expected. 

The market has reacted to the Fed’s decision with the S&P down and gold up this morning:

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