March 16, 2016
The Fed concluded its March meeting today and arrived at different decisions than what was anticipated over the past few months. The number of expected interest rate hikes has fallen from four to two, while the rate will remain steady for the time being.
Although the job market has strengthened over the past few months and inflation has picked up, it will likely not reach the targeted 2% mark. Rather, expected inflation for the year dropped from 1.6% to 1.2%.
One policy that did not change is the reinvestment of the Fed’s principal payments from agency debt and agency mortgage-backed securities. They will continue to roll over Treasury securities that mature at auction, until the federal funds rate is normalized again.