As expected, the U.S. Federal Reserve today announced that it will leave interest rates unchanged. The key short-term rate currently stands at 1.50% to 1.75%, with the Fed indicating that it expects ‘further gradual increases’ in interest rates later in the year.
In its statement, the Fed focused on key themes driving its decision-making, including:
- Strong job gains in recent months combined with low unemployment
- A moderation in household and fixed investment spending
- Inflation expectations in line with the Fed’s 2% target
We’ve seen a slight positive reaction to the announcement in equity markets and little change with the Canadian dollar relative to the U.S. dollar.