The US Central Bank just released their monetary policy statement and it was interesting.
They have downgraded both growth and inflation:
US Core PCE (Personal Consumption Expenditures...the FOMC's best measure of inflation):
So what does all of this mean? It means that the US economy is weakening. Chair Yellen also stated that the strong US$ has hurt exports (as we wrote about last week after Wholesale Trade data).
The end results--> stocks came back with the Dow -150 to +223, bonds rallied 2 full points on 30yrs and about a point on 10yrs, the U$ dropped 1.2% and the C$ rallied 1.4%. There are no two main reasons why the Fed can't raise interest rates..1) the US$ is way too strong and the US economy cannot support it and 2) there is way too much Federal Debt in the world to hike rates!