WASHINGTON, DC—After the Federal Open Market Committee's two-day policy meeting, the Federal Reserve Bank decided to keep the benchmark interest rate where it left it in December. Last month, of course, the Bank finally moved forward with a policy of gradual rate increases, nudging the target range for the federal funds rate upward by one-quarter to one-half percent.

The market reacted in its usual way. The Dow fell 223 points after the announcement.

As with all things Fed, there is disagreement over what the Central Bank plans to do, why it did (or didn't do) what it did and whether this action or non-action was good or bad for the economy.

Comparing the Statements

One school of thought is that the market dropped because the Fed didn't take an increase in interest rates in March off the table. Another opinion is that it will continue with its gradual interest rate increases, just not right now.

Rather than reading between the lines of the statement, Savills Studley's Chief Economist Heidi Learner compared the statement the Federal Reserve released on Wednesday with the one issued in December. There were some omissions that, in Fed-speak, are significant.

For example, she told GlobeSt.com that there was a key sentence in December's statement that didn't make it into this week's statement, which was this:  "Overall, taking into account domestic and international developments, the Committee sees the risks to the outlook for both economic activity and the labor market as balanced."

Instead, there was this sentence: "The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook."

 The difference between the two sentences is that this time the Fed didn't say that the risks to economic activity and the labor market are balanced, Learner said.

"This suggests to me that the Fed might be rethinking its policy of rate normalization for the year," she said. The market came to the same conclusion, she continued, which is why it dropped after the news was released.

A Subtle Change in the Longer-Range Goals and Strategy

Learner also pointed to the little-noticed "Statement on Longer-Run Goals and Monetary Policy Strategy," [PDF] which the Fed updated the day before its decision on interest rates was announced this month.

There is a new sentence in the statement, Learner said, which is this: "The Committee would be concerned if inflation were running persistently above or below this [2% annual change in the price index for personal consumption expenditures] objective."

 The implication? "The Fed's inflation objective is symmetric…inflation above its goal is as important a 'miss' as inflation below its goal," she said.

"James Bullard, a new addition to the 2016 FOMC voting members, agreed the Committee's inflation goal is symmetric, 'but believed the amended language is not sufficiently focused on expected future deviations of inflation from the goal,'" Learner said.

Another change was the reference to the Committee's longer-run normal rate of unemployment, she said.

"Last year, the central tendency was 5.2 percent to 5.5 percent, this year, the median was 4.9 percent."

It appears to Learner that the Fed is beginning to conclude that its earlier decision to raise rates a handful of times this year may have been too aggressive. "There are obviously disconcerting pockets of weakness in the economy that wont readily change."