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US stocks closed lower Wednesday after Federal Reserve officials agreed to keep policies in place — sticking to near-zero interest rates and monthly bond purchases — during the last meeting of the Federal Open Market Committee meeting in March, even as the economy showed clear signs of a rebound.

Officials, according to the minutes released Wednesday afternoon, indicated that policies will not change simply on forecasts alone. While most of the 18 officials saw developments, they wanted some time to be more convinced of progress, such as stronger employment.

“While generally acknowledging that the medium-term outlook for real GDP growth and employment had improved, participants continued to see the uncertainty surrounding that outlook as elevated,” the minutes said. 

The landmark $1.9 trillion stimulus package from President Joe Biden in early March has forced Fed officials to lift their growth and inflation forecast before the meeting.  

The big message from the Fed minutes is that the central bank is as unconcerned in private about inflation as it is in public,” Brad McMillan, chief investment officer for Commonwealth Financial Network, told Insider. “There appears to be no hidden interest in higher rates, suggesting that rates will indeed remain low until unemployment drops down to pre-pandemic levels.”

The US economy has rebounded faster than what most have expected due in large part to President Joe Biden’s landmark $1.9 trillion stimulus package paired with steady vaccine rollout throughout the country, which has helped the labor, manufacturing, and travel sectors recover. The President on Tuesday moved up the timeline for all American adults to be eligible for a COVID-19 vaccine to April 19 from May 1.

The 10-year Treasury yield has held steady at 1.67% after climbing to the highest levels in over a year in March.

“The fact that the bond yields barely changed last …read more

Source:: Business Insider

      

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