Will it be patience before panic?

The Federal Open Market Committee (FOMC) of the Federal Reserve in the US left its Funds rate unchanged at 2.25-2.5% yesterday, while maintaining its commitment to economic growth and keeping inflation at 2%. "The central bank called US economic activity, 'solid', a change from 'strong' in the December statement. That might speak to the Fed detecting signs of slowing in the economy. It noted that its inflation gauges 'have moved lower in recent months," wrote JJ Kinahan. The Fed promised to remain "patient". The Fed's decision was also influenced by global factors. "With the latest eurozone inflation reading clocking in at a less-than-robust 1.6%, and with the ECB having just pushed its next expected rate hike out to mid-2020 (from late 2019), it seems the 'pause-and-patience) approach is occurring on both sides of the Atlantic." This time, the Fed was operating without real time data on unemployment, jobs growth, inflation, and consumer spending because of the long government shutdown which lasted 35 days. "The labor market and consumer spending look strong, but slowing global growth, the protracted trade war and the shutdown itself has darkened the picture. In addition, the housing market is struggling amid elevated borrowing costs and price gains," wrote Chandra and Condon. "The American economy is nearing ten years of expansion," wrote VA Nageswaran. "Excessive risk-taking is evident in the demand for high-yield or speculative bonds and in the record issuance of leveraged loans ( loans made to companies that already have a high debt to equity ratio). In other words, overheating is far more readily apparent in the financial economy than in the real economy. That has been the case with developed economies since the 1990s, if not earlier." "Central banks may be about to face one of their biggest challenges yet: Global economic growth is slowing, but they have struggled to build up their policy arsenals since the last crisis to effectively deal with one another," wrote J Cable. The World Bank warned of "darkening skies" for the global economy. The predicted slowdown is focused on the rich countries, particularly the US, although it will continue to expand more rapidly than either the Eurozone or Japan according to the bank's forecasts." The Japanese Yen has been strengthening recently. "Historically, outsized yen gains in short periods, such as the Russian default in 1998 and the global market meltdown in 2008, are a harbinger of stress for global markets." A poll of 134 CEOs in the US showed that they believe that there will be a recession in the US at the end of this year. Despite that growth in US is predicted to be highest. Scary.