The Federal Reserve met Wednesday, and, as expected, did not raise interest rates. But the Fed's "dot plot" and outlook still calls for 2 more hikes this year. The FOMC's statement reads, "Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months.... A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports.... However, global economic and financial developments continue to pose risks. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further.... Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.... The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data." The new "Summary of Economic Projections" calls for two rate hikes in 2016 with a projected median Federal Funds Rate of 0.9% at the end of 2016, 1.9% at the end of 2017, 3.0% at the end of 2018, and 3.25% in the longer run. In a press conference that followed, Fed Chair Janet Yellen said, "The paths that the participants' project for the Federal Funds Rate and how it will evolve are not a preset plan or commitment or promise of the committee. The median should not be interpreted as a committee endorsed forecast. There's a lot of uncertainty around each participants' projection and they will evolve." When asked about negative rates, she said, "What I'd like to make clear is [negative rates] is not actively a subject that we're considering or discussing. The committee continues to feel we are on a course where the economy is improving and inflation is moving back up. If events continue to unfold in that way, we're likely to gradually raise rates over time."

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