The Federal Reserve (Fed) has decided on a much less aggressive policy on Wednesday, sending a message that it will not raise interest rates this year amid a slowdown in the economy and announcing a plan to end its balance sheet cut program in September.
The Fed reiterated its commitment not to rush on its monetary policy decisions and noted that it would begin to slow down the decline in the US government bond portfolio, reducing the monthly ceiling to $ 15 billion from $ 30 billion.
These two announcements mean that, after tightening monetary policy with two levers last year, the Fed is now stopping on both fronts to adjust to the weaker global growth and somewhat weaker prospects of the US economy.
The revised financial forecasts announced at the end of the Fed meeting also showed that central bank officials did not expect any increase in interest rates this year, while they are expecting just one increase for next year. Stockbrokers see almost divided odds for a fall in Fed 2020 rates.