Federal Reserve and Major Indices

FTN Financial: The Federal Reserve policy meeting was the spotlight of the week, according to Xinhua China. After the conclusion of a two-day meeting, the U.S. central bank decided to keep its federal fund rate unchanged. After falling four times in the past five sessions, all three major indices suffered big weekly losses, with the Dow, the S&P 500 and the Nasdaq tumbling 1.1 percent, 1.2 percent and 1.9 percent, respectively. According to the statement released after the meeting, the Fed continued to lean toward hiking rates. It also reason to think the Fed will continue to hesitate until core inflation finally takes off, if it ever does," said the FTN Financial in its weekly report Friday. However, the Fed "dot plot," which contains the interest rate forecasts of Fed officials, shows that six members now believe there will be just one rate hike this year, up from one member in March. "Caution is all the more appropriate, given that short term interest rates are still near zero, which means that monetary policy can more effectively respond to surprisingly strong inflation pressures in the future than to a wakening labor market and falling inflation," Fed Chair Janet Yellen said in a press conference Wednesday. "A confused and uncertain Fed is more likely to do nothing than something, which helps explain why the list of excuses not to hike seems to grow at each meeting. (news.financializer.com). As reported in the news.