In her press conference on Wednesday, Fed chair Janet Yellen said just because the Fed dropped the word “patient” from its monetary policy statement does not mean it will be impatient in raising rates.
“Patient” was the word the Fed had been using to characterise the time until the first interest rate hike. Economists have interpreted the language as signalling the first rate hike would come in September, and perhaps June.
“The March FOMC statement and projections suggested that September rather than June appears to be the most likely date for the first hike of the fed funds rate,” Goldman’s Jan Hatzius wrote in a note.
Ahead of the statement, many analysts had forecast a rate hike coming as soon as June, and more likely in September.
But those expectations appear to have dampened after the Fed’s statement.
Hatzius also noted that Fed also changed its outlook for the economy, “with growth at a “solid pace” downgraded to growth having “moderated somewhat.””
And now, Hatzius says the first rate hikes could come later than expected.
“Our forecast remains for a September hike, but the risks now appear slightly skewed toward a later liftoff.”