Fed skips May, June remains a strong possibility - BBH

According to analysts from Brown Brother Harriman, the FOMC statement was largely the same as in March. They noted that the reference to weakness in Q1 as transitory, is the closest hint that a June rate hike remains a strong possibility. 

Key Quotes: 

“The Federal Reserve dislikes surprising the market and it refrained from doing so today.  Policy was unchanged and the Fed saw the weakness in Q1 as being transitory.  There were no dissents and no fresh insight into its balance sheet strategy.  “

“The Fed also looked past the weakness in the March non-farm payrolls report, noting that the labor market continued to strengthen in the face of slower growth.  It recognizes the pullback in consumption (calling it modest rather than moderate), but opined that the fundamentals for consumption (employment and income?) were "solid."  The FOMC statement recognized that inflation was not accelerating but on a 12-month basis was close to the 2% target.   

Outside of these modest tweaks the statement was largely the same as in March.  By referring to the weakness in Q1 as transitory, this is the closest to a hint we have that a June hike remains a strong possibility.”