The Fed: How the Fed’s removal of two words set off a firestorm of confusion

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Fed Chairman Jerome Powell

The fact that Federal Reserve policy statements are pored over by investors was driven home once again when the removal of two words from the prior statement set off an intense debate over the central bank’s view of risks to the economy.

When the U.S. central bank issued its statement Wednesday, eagle-eyed Fed watchers noticed the central bank had removed “near-term” from in front of roughly balanced risks.

Since the fall of 2016, the Fed statement had said: “near-term risks to the outlook appear roughly balanced.” In the new statement, released on Wednesday, the Fed simply said “risks to the outlook appear roughly balanced.

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