As expected, the Fed decided against raising interest rates in April, for the third straight meeting since its December rate-tightening.
Despite the hesitancy to raise rates, the central bankers’ statement suggested it's optimistic about US growth, and not as worried about global market turbulence.
The statement said “a range of recent indicators, including strong job gains, points to additional strengthening of the labor market” and high consumer sentiments, Bloomberg reports.
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Robert Bach, Americas Director of Research for Newmark Grubb Knight Frank, tells Bisnow that, regardless of such confidence, the Fed’s ultimate decision was based on data that just isn’t looking hot.
“First-quarter GDP appears that it will come in around 1% or lower, the manufacturing sector is stuck in a ditch, retail sales are meh, and the IMF has repeatedly lowered its global growth forecast to 3.2%, nearing the 2% to 3% level it views as a technical recession,” Robert tells us.
With the Fed holding off a rate hike, the window is closing to fit in rate hikes for the year—especially if it wants to stick with its original four-hike plan.
Still, Robert doesn’t think the Fed has backed itself into a corner regarding a June rate hike.
“I’m not expecting a recession in the US, but I don’t think June is a slam-dunk for the Fed,” he tells us.
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