U.S. Fed drops ‘patience,’ but rate hikes could be slower than expected

A trader on the floor of the New York Stock Exchange watches Federal reserve Chair Janet Yellen's news conference

The U.S. Federal Reserve prepared markets on Wednesday to have an interest rate hike later this season, removing the word \”patient\” from its policy statement even while it downgraded its economic outlook.

The Fed\’s new weaker outlook, for both economic growth and inflation projections, shows that, while the central bank is on the right track to raise rates of interest later this season, the hikes could be slower and much more spread out than originally believed.

Markets have also now began to price in a hike later in the year. While original consensus pegged a hike in the June meeting, expectations happen to be moved on to September now.

\”The Federal Reserve appears to be likely to start hiking sooner than may have been the situation in the past, but move rates of interest up more gradually when the process begins,\” said Andrew Grantham, senior economist for CIBC World Markets.

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