The Federal Open Market Committee (FOMC) kept the target Federal Funds Rate unchanged at 0.25% to 0.50% at its March meeting. The Committee lowered its assessment of the overall economy, inventory investment, and net exports but continued to describe the labor market as “strong.” The announcement makes a rate hike in April, and perhaps June, unlikely. The Committee reduced its expected year-end target rate from 1.4% to 0.9%.
Retail sales were down in February as consumer spending fell. February month-over-month sales were down -0.1% but had a positive reading of 0.3% excluding autos and gas. Additionally, retail sales for January were sharply revised downward to -0.4% from 0.2%.The report confirms that consumer spending although strong YoY was weak in the start of 2016. The University of Michigan’s consumer sentiment index fell to 90, its lowest level since October. 1-year consumer inflation expectations rose .2%.
Oil futures hit 2016 highs on Friday amid continued news of a possible deal among OPEC members to freeze production. On Wednesday Qatar’s Minister of Energy announced OPEC and other oil producers would meet on April 17.
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