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Fed Expected to Hold Rates Steady as Brexit Vote Clouds Outlook

Posted by Chris Advincula on Jun 15, 2016 4:03:41 AM

(Jun 15 Reuters) The Federal Reserve is expected to keep interest rates unchanged on Wednesday and signal if it still plans to raise rates twice in 2016 amid concerns about a U.S. hiring slowdown and Britain's possible exit from the European Union.

The Fed raised its key overnight lending rate in December for the first time in nearly a decade, but it has backed away from further monetary policy tightening this year largely due to a global economic slowdown and financial market volatility.

The U.S. central bank is scheduled to issue its latest policy statement and updated economic projections following a two-day meeting at 2 pm EDT (1800 GMT). Fed Chair Janet Yellen will hold a news conference half an hour later.

The Fed's targeted overnight lending rate is forecast to remain in the current range of 0.25 percent to 0.50 percent, according to a Reuters poll of 151 economists.

Fed forecasts in March pointed to two rate rises in 2016, but a sharp slowdown in U.S. job gains in May and the prospect that Britain could vote next week to leave the EU have added to doubts about the economic outlook.

With U.S. hiring expected to bounce back in June and no financial meltdown from the Brexit vote currently seen, economists in the Reuters poll now expect the Fed to tighten monetary policy in July or September.

Yellen, however, recently warned that a British exit from the EU could have a significant economic impact, a concern shared by other Fed policy makers.

Click on the link below to see the full story from Reuters: (by Jason Lange)

Fed expected to hold rates steady as Brexit vote clouds outlook

Fed.Wash.pix.6.15.16.jpg

 

 

Topics: Fed, US Dollar, Interest Rate, Forex, Federal Reserve monetary policy, Fundamentals

 

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