US central bank softens its tone and will await more evidence of growth and inflation before hiking interest rates again.
When the US central bank, the Federal Reserve Bank (the Fed), announced the outcome of its interest rate meeting on Wednesday, the tone was surprisingly soft and the rhetoric rather different to earlier. The announcement was well received by the markets. Whereas central bank chair Janet Yellen previously focused on not wanting to be behind the curve with interest rate hikes, on Wednesday she signalled the Fed would be in no rush. What we heard was a central bank signalling it now wanted clear evidence of wage growth and rising inflation before firming its rhetoric. This was a clear shift in tone compared to the previous few quarters.
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