The Federal Reserve moved a step closer to a much anticipated first rate hike since 2006 by removing ''patient'' from its language, although markets bet on a fall hike after it downgraded the expected pace of growth and inflation. Bobbi Rebell reports.
The door is opening up a little bit more to a June interest rate hike.. the Fed taking the language referring to 'patience' out of their statement, following its two-day policy meeting. SOUNDBITE: JANET YELLEN, CHAIR, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "Today's modification of our guidance should not be interpreted to mean that we have decided on the timing of that increase. In other words, just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient." The Fed also showed a bit more caution regarding the economy - cutting its inflation outlook for the year: SOUNDBITE: JANET YELLEN, CHAIR, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "There has been a slight downgrading of estimates of growth for this year. You mentioned the dollar. We noted that export growth has weakened, probably the strong dollar is one reason for that. On the other hand the strength of the dollar also in part reflects the strength of the U.S. economy." Stocks moved higher on the news - the Dow closing up more than 200 points. Traders have backed up their rate hike expectations to October according to CME FedWatch. The 10-year U.S. Treasury yield dipped below 2 percent, and the euro rose against the dollar. Bankrate.com's Greg McBride: SOUNDBITE: GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE.COM (ENGLISH) SAYING: "The markets responded very favorably because the Fed did what was expected, and at the same time the markets are getting the message that you know what? The Fed's not in a hurry to raise rate, and we are probably going to have these near zero interest rates for a few months longer than we thought." The next Fed meeting starts April 28th.