They removed the word “patient” from their statement however it wasn’t the wording in the statement that drove traders to abandon the US Dollar and jump into US stocks on Wednesday. It was the Fed’s adjustment of its expectations for the US economy when it comes to inflation, growth and interest rates.
Traders on Wednesday assumed the US Fed would raise rates later in the year rather than sooner however Janet Yellen really didn’t give a firm indication either way. She simply said the Fed had removed the word “patient” from its statement but said the Fed could make a decision any month to raise interest rates. She’s certainly frustrating the market with her Dovish but yet slightly Hawkish comments.
Clearly the US Fed doesn't see the economy strong enough just yet but it is ensuring the market knows that if the data does rebound strongly, inflation lifts and job creation continues it could act at any time. One part of the statement that was also responsible for the US Dollar diving on Wednesday was the fact that US Fed lowered its forecast of where the official cash rate will be in December this year. It lowered its forecast by 0.50%.
You can read the full report in Today's LTG GoldRock Insider Report. for more information about our trading community and how you can learn to trade go to www.ltggoldrock.tv
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