The Fed left the target range for the federal funds rate unchanged at 0-0.25% during its March meeting, and hinted at a strong possibility that there may not be a rate hike until 2023.

Policymakers noted that indicators of economic activity and employment have emerged recently, although the sectors most affected by the pandemic remain weak.

The central bank is revising GDP forecasts for 2021 and 2022 due to President Biden's approval of a $ 1.9 trillion economic recovery package and an ongoing COVID-19 vaccination program. The US economy as the world's largest is seen growing by 6.5% this year (vs 4.2% projected in December) and 3.3% in 2022 (vs 3.2%).

The PCE price index is forecast to increase by 2.4% in 2021 (vs 1.8%) and 2.0% in 2022 (vs 1.9%). Regarding the labor market, the unemployment rate is now seen at 4.5% this year (vs 5.0%) and 3.9% in 2022 (vs 4.2%).

The market reacted to the statement by the Fed Chair, Jerome Powell, by releasing some of the positions in the dollar so that it weakened, but analysts predict that the improvement in future US economic projections will allow US Treasury yields to rise again and the dollar can be pushed back up at a later date.

Source : Berita Forex /