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Fed Thoughts

Rich Walls - Friday, June 19, 2015

On Wednesday the Federal Reserve announced it was leaving unchanged its 0-.25% Federal Funds target at this time. While noting the improvement in Q2 economic data from the disappointing Q1, interestingly the Fed reduced its 2015 GDP growth forecast from the previous range of 2.3-2.7% to the new projection of 1.8-2.0%. If stronger economic data supports it, the Fed will likely initiate one or two quarter point increases in the Fed Funds rate before year-end.

The US Dollar declined immediately after this statement and has now declined by nearly 6% over the past two months. This price action suggests that the currency headwinds plaguing multinationals recent earnings reports could soon be ending.

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