FOMC Announcement Keeps “Transitory” Language

fomc announcement word cloud


The FOMC Announcement released today shows that the Federal Reserve continues to view the currently slowdown in the U.S. economy as nothing more than a “transitory” phase.

Overall I think it is a dovish statement. It acknowledges weakness in Q1 and it didn’t offset that with positives, other than to say weakness is transitory. It gives no clues about the timing of a first rate hike.Source: www.barrons.com

We need to watch the GDPNow forecast for the Q2 2015 GDP estimate. If we see a massive turn around in Q2 2015 GDP estimates, I think we get a rate hike by September 2015 at the latest. Bar some spectacular turnaround, I think we can say rate hikes for June are off the table after the FOMC Announcement today.

FOMC Announcement Shows Small Downgrade Of US Economy

The Fed’s language changed to be slightly more bearish on the economy than they were at the March meeting. Household spending was changed from “rising moderately” to “declining”. Business investment was changed from “advancing” to “softening”. Exports changed from “weakening” to “declining”. Labor conditions were changed from “improving” to “moderating”.

Below is a word cloud of today’s FOMC Announcement (click on the image below to enlarge):

fomc announcement word cloud

Author: Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.

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