It was no surprise that Federal Reserve officials decided to hold interest rates steady on Wednesday. But what they said about global conditions—and didn’t say about the inflation outlook—leads us to believe they may not pull the trigger in March, either.

The Fed raised rates last month for the first time in nearly a decade. On Wednesday, the rate-setting committee said it was “closely monitoring global economic and financial developments” and is “assessing their implications for the labor market and inflation.”

Absent from their policy statement this time around, however, was an assertion that they were confident that inflation would rise over the medium term, based on the strength of the labor market. To us, this says they’re not so sure that inflation will rise as much as previously expected, thanks to financial market turmoil and sharply lower oil prices.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

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