As expected the Fed left interest rates untouched, but the policy statement and press conference continued a remarkable streak of increasingly dovish communications. The Fed dropped the language about making “further gradual increases” and instead said it "will be patient as it determines what future adjustments to the… federal funds rate may be appropriate." Chairman Powell also said in the press conference that "The case for raising rates has weakened somewhat”. The Fed also addressed the balance sheet reduction program, saying it "is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments," and said the Fed "would be prepared to alter(ing) the size and composition of its balance sheet, if future economic conditions were to warrant a more accommodative monetary policy.” The market probability of a rate hike this year dropped after the meeting from 20% to 10%. In other news, consumer confidence fell for the third consecutive month to the lowest level in 18 months. The declines have been driven by steep losses in the expectations component of the survey which is now at the lowest level in two years.
