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Many investors seem to get scared going into some Federal Reserve meetings, particularly when we are in a period of time where investors, consumers and business owners worry that the Federal Open Market Committee (FOMC) may keep raising interest rates too far or too fast. As expected ahead of time, there was no rate hike by the FOMC. The vote was a unanimous 8-0 vote to keep Fed Funds steady in the target range of 1.50% to 1.75%. Also left unchanged was the 2.25% discount rate.

There is a very blunt read that should be given some consideration. A look at the wording should ease at least some fears that Jerome Powell is just wanting to raise interest rates just for the sake of raising interest rates. After all, he does not want to kill the growth that has been seen. That said, some interest rate hiking activity should still be expected as things stand now.

While the Fed Funds rate was not changed, the basic commentary from the Fed is that the 12-month inflation outlook is expected to run near the Fed’s 2% target over the medium term. That is even while there is strong growth in hiring and in investment.

One other issue stands out here. The Fed also believes that the risks to economic outlook appear roughly balanced. If the risks are equal, should the public really be scared that Jerome Powell is going to raise rates endlessly or to a point that it breaks the economy’s backbone?

The Fed’s view is that economic activity has been rising at a moderate rate and that it sees economic activity expanding at a moderate pace in the medium term. Another view is that growth of household spending moderated from the strong pace in the fourth quarter.

At the end of the day, the FOMC is still expecting further gradual increases in the fed funds rate. While the balance of risks may be mixed, the Fed did note an accommodative stance remains in place:

The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

And the conclusion statement said:

The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The FOMC did not spend much time on addressing its balance sheet shrinkage. That said, there has been some continued shrinkage based upon previously reported Federal Reserve data. The massive balance sheet was down to $4.372 trillion as of April 23, 2018  — down from a peak of just over $4.5 trillion.

Stocks perked up marginally since the 2:00 p.m. statement. The Dow was last seen up 35 points at 24,134 and the S&P 500 was last seen up 2 points at 2,656.70. The yield on the 10-year Treasury was last seen at about 2.965% and the yield on the Treasury’s 30-year long bond was 3.12%.