When FED vice chair commented weeks back that early stirrings of inflation visible and he is now more confident that inflation will be approaching FED’s 2% medium term goal, market participants might have thought FED to be more hawkish over US economic prospects and inflation.

However in that context, FED’s March projections were utter disappointment. It is now evident, stronger labour market, despite hike in December by 25 basis points and inflation jitters are not enough for FED to consider a sharper hike path.

• According to latest projections, FOMC participants reduced their growth forecast for the year by 0.2% to 2.2% and 2017 forecast by 0.1% to 2.1%.

• FOMC participants have kept their unemployment rate forecast steady at 4.7% for this year and 0.1% lower for 2017 at 4.6% and 0.2% lower for 2018 at 4.5%.

• It reduced headline inflation forecast by 0.4% to 1.2%, while keeping it same for 2017 at 1.9%.

• It kept its forecast for core inflation steady at 1.6% for this year and 0.1% lower for 2017 at 1.9%

If wage growth is showing signs of pickup, labour market remaining strong, inflation stirrings visible, it could be January turmoil that kept FED hooked to dovish bias.

It’s no wonder Dollar has fallen victim to this dovish projections. Dollar index currently trading at 95.6, down -0.13% today.