With No Chance Of A Rate Hike, Investors To Focus On Fed's Economic Analysis

This week, the US Federal Reserve has convened to discuss the state of the nation's economy. While the biggest question on most investors' remains when and how the bank will begin raising interest rates, Fed Chair Janet Yellen's reassurance that a rate hike won't happen this month means markets will be more focused on the bank's explanation for the US recent economic weakness. Inflation Inflation remains a key factor in the bank's assessment of the US economy. For three years, inflation in the US has remained below the bank's 2 percent target, but in March the bank was optimistic about rising consumer prices. In this month's policy statement, the bank is expected to comment on the US' rising inflation figures and maintain its expectations for steadily rising interest rates. Strong Dollar Many investors are also expecting the bank to comment on the effect that the strong US dollar has had on the economy. With other central banks around the world moving in the opposite direction, the greenback has risen quickly over the past few months. As a result, some are becoming worried about how the US will sustain its economic growth as US exports become less appealing around the world. To Hike Or Not To Hike? While this meeting won't announce a rate hike, investors are still hoping that the Fed provides some clues about its plans for a future increase. Recent labor data showed that the US labor market may not be as strong as many had perceived, causing many to revise their rate hike estimates to later in the year. Most have ruled out a June rate increase and are now expecting the bank to wait until September to raise rates. The bank is unlikely to provide any concrete details regarding its plans, but instead the Fed will likely maintain its promise to remain patient until data suggests that a rate hike can be weathered by the US economy.