The Federal Reserve announced this Wednesday that it will hold the benchmark interest rate after a two day policy meeting. It also reiterated that recent slowdown in first quarter of CY17 is transitory “The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2% over the medium term”.

Although, committee acknowledged the ongoing slow growth and weakened consumer spending, they expect it to be transitory and temporary. They anticipate a higher growth and economic activity based on solid fundamentals underpinning the current growth. This optimism hints at a rate hike in coming meetings during June and September. Expectations of rate hike in June have increased to 90% post FOMC meeting.