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As expected, the Federal Reserve kept the target range for the fed funds rate unchanged at 25-50bp at its January 26-27 meeting. According to the post-meeting statement, the FOMC is closely monitoring global economic and financial developments and assessing their implications, leaving out December’s formulation that described risks as being broadly balanced. Furthermore, the FOMC did not reiterate that “it is reasonably confident that inflation will rise over the medium term to its 2% objective”, showing increased worries over on the US inflation outlook. Adding to this, in his speech ahead of the January FOMC meeting, Fed’s Bullard emphasized the Central Bank’s concerns about falling market inflation expectations.