Weekly Market Commentary 07/28/2017

The Federal Reserve stuck to its long-standing script at this week’s policy-setting meeting. As expected, the central bank kept its policy rate unchanged, leaving the federal funds rate at the 1%-1.25% range set at the June meeting, when it was raised a quarter-point for the third time in three consecutive quarters. According to the post-meeting policy statement, Fed officials continue to believe that economic conditions will justify gradual rate increases going forward which, according to earlier predictions, include one more this year. As well, the policy statement indicated that the Fed will start to reduce its $4.5 trillion balance sheet “relatively soon,” with the actual launch date of the normalization process expected to be announced at the September meeting.