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The Fed Is Less Worried Than It Used to Be

Yellen Testifies At Joint Economic Committee Hearing On Economic OutlookYellen Testifies At Joint Economic Committee Hearing On Economic Outlook
Federal Reserve Chairman Janet Yellen testifies before a Joint Economic Committee hearing on Capitol Hill, December 3, 2015 in Washington, DC. Mark Wilson—Getty Images

Wall Street cut losses on Wednesday after Federal Reserve left interest rates unchanged but opened the door to a resumption of monetary policy tightening this year.

The Fed had not been expected to move interest rates at its two-day meeting, but investors have been anxious for hints about when a hike might come following concerns about potential fallout from Britain’s vote in June to leave the European Union.

The U.S. central bank indicated less worry about possible shocks that could push the U.S. economy off course and noted that inflation expectations were little changed in recent months.

“It sounded a reasonably upbeat tone, not a big difference from last time, but a reasonably upbeat tone,” said Kathy Jones, chief fixed-income strategist at Charles Schwab and Co in New York.

Major stock indexes reversed losses following the announcement.