“Several Federal Reserve policy makers said a rise in their median projection for the main interest rate exaggerated the likely speed of tightening, according to minutes of their March meeting. ‘Several participants noted that the increase in the median projection overstated the shift in the projections,’ the minutes of the March 18-19 Federal Open Market Committee meeting showed. Some expressed concern the rate forecasts ‘could be misconstrued as indicating a move by the committee to a less accommodative reaction function.’ Treasury yields rose last month after policy makers predicted that the benchmark interest rate would rise faster than previously forecast. Janet Yellen, presiding over her first meeting as chair, later downplayed the importance of the forecasts, even as she said that rates might start to rise ‘around six months’ after the Fed ends its bond-purchase program.” According to Financial Post article by Bloomberg News. Article continued with “The Fed reduced the monthly pace of purchases by US$10 billion, to US$55 billion, and repeated it is likely to continue paring the program in ‘further measured steps.’ ‘Members agreed that there was sufficient underlying strength in the broader economy to support ongoing improvement in labor-market conditions,’ the minutes show. The FOMC next meets April 29-30. The committee last month scrapped its pledge to keep the main interest rate low at least as long as unemployment exceeds 6.5%, saying it will look at a broader range of data when considering when to increase borrowing costs. Fed officials predicted that the benchmark interest rate would rise faster than previously forecast. Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS
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