Fed now sees no rate hikes in 2019

2019 Stocks increase

From Spencer Kimbell: The Federal Reserve said Wednesday it expects the benchmark rate to stay near 2.4 percent by the end of 2019, slashing its forecastfrom 2 hikes for the year to zero.

The Fed said its benchmark rate will approach 2.6 percent in 2020 and remain at that level through 2021. In the longer run, the central bank expects rates to rise to 2.8 percent.

Chairman Jerome Powell and the Fed have softened their approach toward interest rates after spooking markets late last year. In January, Powell said the case for raising interest rates had weakened and the committee vowed to take a more “patient” approach toward hiking rates.

The committee reiterated its “patient” approach on Wednesday.

Every quarter, Fed policymakers submit their projections for where they expect short-term interest rates to go. These submissions are visualized in a so-called dot plot, which shows how many members think rates will hit a given level over the short, medium and longer run.

Here are the Fed’s latest targets, released in Wednesday’s statement:

This is what it looked like in December:

The iShares 20+ Year Treasury Bond ETF (TLT) was trading at $122.49 per share on Wednesday afternoon, up $1.08 (+0.89%). Year-to-date, TLT has declined -2.63%, versus a 6.35% rise in the benchmark S&P 500 index during the same period.

TLT currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #16 of 28 ETFs in the Government Bonds ETFs category.

This article is brought to you courtesy of CNBC.