The Federal Reserve has done an about face on inflation.
The U.S. central bank has gone from saying there will be no inflation to noting that it will be brief to estimating that it will top its target rate for the remainder of the year.
Fed Chair Jerome Powell and Co. left its benchmark interest rate at 0.25 percent.
According to the Federal Open Market Committee (FOMC), the central bank will not raise rates until at least 2024, although some individual members believe the Fed could pull the trigger on two rate hikes in 2023.
Policymakers also increased their gross domestic product (GDP) forecasts from 6.5 percent to seven percent. They also left their unemployment projection unchanged at 4.5 percent.
Eccles Building occupants refrained from revealing when they would begin to taper its ultra-aggressive bond-buying program. In other words, no word yet on a taper tantrum.
The real headline coming out of this meeting was that the Fed increased its headline inflation expectations by a full percentage point from its March projection: 3.4 percent.
Financial markets plummeted on the news, with the Dow Jones Industrial Average sliding nearly 300 points after the two-day policy meeting. The S&P 500 shed 0.77 percent, while the Nasdaq Composite Index dropped close to 100 points.
The benchmark 10-year bond yield rose 0.032 percent to 1.531 percent.
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