The Fed sees an improved outlook but does not change course

Highlights:

• The Fed delivered an optimistic message on the state of the economy, signalling a sizeable reduction of the risks to the outlook.
• However, the economy and especially the labour market have yet to show the substantial improvement needed to start thinking about tapering.
• The looming inflation spike will be transitory and will not affect inflation expectations. They are increasing but still low enough to warrant accommodation.

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