Prolonging the Pause (Capital Market Research) (Weekly Market Outlook

The Federal Open Market Committee on Wednesday kept the fed funds rate unchanged and acknowledged a lack of progress in its fight against inflation in recent months. The U.S. labor market continues to churn out new jobs and the unemployment rate has held below 4% for more than two years. The preliminary estimate of first-quarter GDP was weak, but underlying details indicate consumers are still in good shape. Against this backdrop, policymakers can afford to sit on their hands until inflation is unambiguously cooling.