Eyeing the Global Economy, the Fed Blinks on Interest Rates

For a meeting at which nothing happened, the March 16 gathering of the Federal Open Market Committee was rather eventful. The panel, as expected, voted to keep interest rates steady. Indeed, it would have been a major surprise had the Federal Reserve's rate-setting arm decided to continue its path of monetary tightening. But an unexpected development that came out of the meeting was new guidance on expected rate hikes for the rest of the year. The Fed, which earlier had announced expectations of four rate increases throughout 2016, now says it expects to make only two. This announcement had a dramatic effect on the dollar, dropping it to a five-month low. ...