Market Insider

Fed tells market: We're taking summer off

Recent economic indicators mixed: Yellen

The Federal Reserve sent a strong signal that it now expects only one interest rate hike this year, and the market now sees less than a 50 percent chance of even one rise by year-end.

The Fed's post-meeting statement and new forecast did not contain many surprises, and stocks held steady, but the , most sensitive to Fed news, rallied hard. The dollar fell slightly.

The U.S. central bank continued to lean toward hiking rates, but the Fed's "dot plot," which contains the interest rate forecasts of Fed officials, shows that six members now believe there will be just one rate rise this year, up from one member in March. Even though the central bank's official forecast still shows two rate hikes, Fed watchers took the increase in sentiment for one hike as a more important indicator.