The Federal Reserve left the fed funds rate unchanged at 5.25%.  However they did change their reporting language in an important way that reflects more concern with economic growth. Instead of referring to future "tightening," they referred to generic "policy adjustments," a more neutral stance. Pretty clearly the Fed thinks the economy is not performing as well as it did a few months ago. But how much are they worried? Bear Barry Ritholz of Ritholz Research said the following

The Fed's statement was as close to sarcasm as you might ever expect to hear from that august body. … Of course, they can't say what they really think. The Fed knows how important confidence is, and they do not want to do anything to discourage consumer sentiment or spook the psychology of the markets. If they were unconcerned with those issues, the statement might look more like this: "…Recent indicators have been much worse than what we were hoping for: Housing is a bigger mess than we anticipated; Business Capex is heading south, as are durable goods. Retail sales have been punk for 3 months running, … Don't even ask about the auto makers. We expect the economy is likely to continue to soften until it slips to about a 1.5% GDP."

As you'd expect, the stock market rallied since they now see some potential for future rate cuts by the Fed. To discuss this further, contact us!