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Federal Reserve Chairwoman Janet Yellen said her economists still don't quite understand what cause inflation to go down, and that they will be monitoring it over the next several weeks.

http://www.trunews.com/article/fed-holds-interest-rates-announces-drawdown

Citing strength in the U.S. job market, business investment growth, and “moderate but durable” economic expansion, the Federal Reserve—as expected—left interest rates unchanged at the end of its two-day policy meeting Wednesday. One more increase to range between 1.25 and 1.50 percent is likely before the end of the calendar year, which is about a quarter-point increase over the central bank’s current benchmark. Wall Street yawned.

The Fed also announced it will begin a “drawdown”—a move to decrease the number of assets remaining on its balance sheet—next month. It currently holds approximately $4.2 trillion in Treasury bonds and mortgage-backed securities dating back to the 2007-09 financial crisis. In October, it will begin selling off about $10 billion from its maturing securities each month. That, too, had been widely expected and produced no tangible reaction from the financial markets. Chairwoman Janet Yellen held a press conference after the end of the meeting, and stated that the recent decrease in inflation was a “mystery” to the Fed’s economists. She added:

>"What we need to figure out is whether the factors that have lowered inflation are likely to prove persistent [and if so], it would require an alteration of monetary policy."

The Fed still forecasts three interest rate increases in 2018, two in 2019, and one in 2020, and set the estimated long-term rate at a range between 2.75 and 3 percent. Inflation is expected to remain at or below 2 percent through 2019.