Subtle shift in the FOMC statement language indicates why rate cuts have been put on hold

The changed language of most note in the Federal Open Market Committee (FOMC) statement.

On inflation, this:

• “Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated”

was changed to

• “Inflation remains somewhat elevated”

ie, ‘made progress’ was dropped. This is key. Goldman Sachs picked up on it:

• Goldman Sachs says Federal Reserve is waiting for further inflation progress to cut again

On jobs, the words that the employment markets had “generally eased” in the prior statement was removed, and now we have:

• “The unemployment rate has stabilized at a low level in recent months, and labor conditions remain solid.”

Trump is not happy:

• Trump speaking – he is really upset the Federal Reserve didn’t cut interest rates

He is going to remain unhappy with the Fed on hold for a while at my guess.

A hawkish hold.

This article was written by Eamonn Sheridan at www.forexlive.com.