FED draws back on 2016 rate rise trajectory
In the FED’s latest meeting the US central bank has scaled back its forecasts for interest rate rises this year to just 2, down from the previously agreed 4 rate hikes. This announcement finally brought FED thinking in line with that of the markets. Whilst the FED remained very positive on the fundamentals of the US economy the main risks cited for this reduction were global headwinds adversely affecting the path of the US recovery. Markets were buoyed by the news that the FED would not look quite so out of sync with other central banks around the world with equity markets seeing a rally in risk assets, FX markets seeing the dollar give back some of its strength and Brent Crude heading back over $40 per barrel.