Fed damps rates expectations as economy loses momentum

29-Apr (Financial Times) — The US recovery has lost momentum and the pace of hiring has moderated, the Federal Reserve said, acknowledging a weakening in the economy that has prompted markets to push back expectations of interest rate rises.

The central bank said that growth had “slowed” during the winter months reflecting “in part” transitory factors, while growth in household spending had declined even amid strong rises in real incomes, and exports had fallen.

However in its statement the Fed said that despite the weakening in output and employment growth it expects activity to expand at “a moderate pace”.

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PG View: A more dovish take on the FOMC statement from the FT.