Hedging

   The worldwide economic outlook and a slowdown in domestic growth led the Federal Reserve to hold off on its plan to raise interest rates in America, despite improved labor conditions and increased household and business spending.
   In an unusually long statement released Wednesday on a January meeting of the Fed's Open Market Committee, the central bank said it would hold its key federal funds interest rate target range at 1/4 percent to 1/2 percent as it attempts to manage the nation's inflation rate to 2 percent or below.
   In addition, the FOMC expects "only gradual increases" in the federal funds rate to match changes in economic conditions.  That means the federal funds interest rate "is likely to remain, for some time, below" levels over a longer time.

   As noted here last week, the U.S. economy, while reasonably healthy now, faces increasing drag from struggling economies around the world.
   That's the crux of what Fed chair Janet Yellen told Congress, a sign that the Fed sees an approaching storm that could drag the American economy away from its path to full recovery.

   With luck and careful monitoring, which the Fed promises to do, economic recovery in the U.S. will continue, albeit slowly even as other major nations continue to struggle.

   Separately, a hedge fund based in London predicted that if the UK leaves the European Union, Ireland will be forced to leave also, because of the close economic ties between the two countries.
   This prediction did not sit well with the Irish, on this 100th anniversary of the Easter Rising that brought independence after more than 400 years of domination by England.