Fed leaves policy unchanged, removes reference to global events posing risks

The Federal Reserve decided to leave the target range for the fed funds unchanged at 0.25%-0.50% as widely expected, and gave no clear signs whether the bank will hike rates at the June 14-15 meeting.

However, the Fed did remove reference to the global and financial developments posing risks to their outlook, tilting the statement to the hawkish side.

Regarding the economic outlook, the Fed said that “labor market conditions have improved further even (since March meeting) as growth in economic activity appears to have slowed”. Officials noted household spending has slowed even though real income has risen and consumer sentiment remains high.

The Fed repeated that it will continue “to closely monitor inflation indicators and global economic and financial developments," the statement said.

Fed's George the lone dissenter in favour of hiking rates by 25bps at the time being.