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US Fed to hold rates steady; two more companies set to delist

Amala Balakrishner
Amala Balakrishner3/25/2019 07:30 AM GMT+08  • 6 min read
US Fed to hold rates steady; two more companies set to delist
SINGAPORE (Mar 25): The US Federal Open Market Committee has turned neutral as expected, signalling it will hold rates steady at the current 2.25% to 2.5% until the end of the year. It also announced that it would halve its monthly redemption limit and ce
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SINGAPORE (Mar 25): The US Federal Open Market Committee has turned neutral as expected, signalling it will hold rates steady at the current 2.25% to 2.5% until the end of the year. It also announced that it would halve its monthly redemption limit and cease its balance sheet unwinding process this September.

The move by the US Federal Reserve comes at a time of lowered GDP growth forecast of between 1.9% and 2.2% this year, from a forecast of 2.3% to 2.5% in December. Unemployment, a key indicator used by the Fed to make decisions, is now seen to be at between 3.6% and 3.8%, slightly worse than between 3.5% and 3.7% previously. “It may be some time before the outlook for jobs and inflation calls clearly for a change in policy,” says Fed chairman Jerome Powell.

Selena Ling, OCBC’s head of treasury research and strategy, says: “These adjustments are not unexpected, but reflect the mood for caution.” The relatively muted Asian market reaction to the slightly more dovish outcome suggests that it was largely priced in, says Ling. In the interim, risk appetite is likely to remain generally supportive and may vary going into the month-/quarter-end when profit-taking interest may emerge, especially with US President Donald Trump’s warning that Chinese tariffs will stay until China “lives by the deal”, she adds.

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