As expected, the Federal Reserve left policy unchanged.  For the third straight meeting, they left out any assessment of the balance or risks and said that they ‘continue to monitor inflation indicators and global economic and financial developments.

The big concern going into the meeting was that the Fed could describe risk as more closely balanced, potentially providing a strong signal for a June rate hike.

The statement no longer explicitly flagged global economic and financial developments as a source of downside risk.  While the statement noted that labor market conditions continue to improve, inflation is still well below their two percent objective.

One of the unstated considerations for a June hike is the Brexit referendum that will occur less than 10 days after the next Fed meeting.  Fed officials must be concerned that a hike could disrupt markets right in front of what could be a tumultuous period depending on the outcome of the vote.

In any case, the Fed reiterated that monetary policy is likely to be adjusted gradually.