>> The case for raising rates has weakened somewhat.>> And with that, Federal Reserve Chairman Jerome Powell hit the pause button Wednesday. The Fed held its key interest rate steady in the two and a quarter to two and a half percent range.>> Over the past few months we have seen some cross currents and conflicting signals about the outlook.
Growth has slowed in some major foreign economies, particularly China and Europe. There is elevated uncertainty around several unresolved government policy issues including Brexit, ongoing trade negotiations, and the effects from the partial government shutdown in the United States.>> Put those all together, and while the Fed doesn't see a recession on the horizon, it is concerned enough to downshift expectations of any future rate hikes, something unthinkable just a few weeks ago.
That was a huge relief to investors who feared the Fed was out of touch. Wall Street also liked what the Fed had to say about the selling down of $4 trillion in assets the Fed purchased to prop up the economy after the financial crisis. Reuters Fed correspondent Jonathan Spicer.
>> After a tweet from President Trump last month, and sort of the markets imagination being captured by this particular policy, the Fed has been under immense pressure to adjust it. To say that it wouldn't trim its balance sheet quite as far as it had intended, to say something, to give something to financial markets.
So we are increasing and worried that this balance sheet runoff plan was doing everything from creating volatility to hurting stock markets, and today we had Chair Powell panel sort of blink, in way.>> The fed is taking its balance sheet wind down, off autopilot. The DOW rallied more than 400 points Wednesday, and is up more than 7% so far this year.