The following tweet from @BobBrinker sums up today’s FOMC announcement quite nicely:
The Fed lowered its 2015 PCE inflation forecast to a range of .6%-.8% from a previous range of 1.0%-1.6% and also lowered its 2015 GDP growth forecast to a range of 2.3%-2.7% from a previous range of 2.6%-3.0%. The Fed also noted that “export growth has weakened” (clearly a result of the huge US dollar rally).
Simply stated it would be unthinkable for the Fed to begin hiking rates against a backdrop of deteriorating GDP growth and mounting dis-inflationary pressures. Gold spiked above $1170/ounce following the announcement and risk assets such as equities and crude oil were also strongly bid:
Read also: The Fed Isn’t Hiking Rates Anytime Soon