The Fed voted unanimously to leave interest rates unchanged in a range of 3.5%-3.75% but were split over whether they expect to raise rates this year. The dot plot indicated 9 of 18 officials foresee at least one quarter-point hike this year, while 8 others (17 of 18 total) expected no move or a cut. We presume the missing dot belongs to new chair Kevin Warsh who may be trying to de-emphasize forward guidance by Fed officials.
Three observations:1/ Median forecast rate by year-end 3.75% vs 3.4% in March.2/ The statement ends hawkishly with its emphasis on price stability rather than its dual mandate of focusing on both price stability and maximum employment.3/ The Fed statement was materially shorter, with a word count of 130 words vs 341 words in April.
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