By Steve Rothwell
THE ASSOCIATED PRESS
The Federal Reserve surprised financial markets on Wednesday with a cautious outlook on the economy, pushing stocks and bonds sharply higher.
After wrapping up a two-day meeting, Fed policymakers left open the possibility of a rate increase later in the year, but also lowered the central bank’s forecast for economic growth and noted that inflation would likely remain low.
Investors judged that the tentative tone stuck by policymakers meant that while rates may soon be heading higher, the pace of any increases will be more moderate than they had previously thought.