Last night the Federal Reserve altered its outlook for how many more interest rate hikes it believes will be needed to support full employment and 2% inflation. The Fed maintained the target range for its benchmark interest rate at 2.25%-2.5%, an anticipated pause after the Fed increased this range by 0.25% in December, its fourth increase of 2018.
This was one of two key changes that signal to investors an overhaul in how the central bank thinks about monetary policy and the economy. The Fed released a new statement (alongside its monetary policy decision) that further outlines its view of the role that reducing the size of its balance sheet plays in setting monetary policy.
Yesterday EU leaders called on Theresa May to unveil a proper plan to replace the Irish backstop after she and her Brexit Secretary both failed to explain exactly what she wants. Frans Timmermans, deputy head of the bloc, pleaded with the UK “to clarify its intentions with respect to its next steps as soon as possible” as Irish foreign minister Simon Coveney accused Britain of “wishful thinking”.
The European Commission unveiled proposals for the UK to keep up its payments for the 2019 EU budget and beyond. In the plan from Brussels the UK would have to consent to the plan, with a deadline to agree set for 18 April – deliberately placed after the effects of a no-deal would have become apparent.