The latest Federal Reserve news today is the FOMC rate statement and press conference by the FOMC Chair, Jerome Powell which took place on Wednesday, January 29, 2020. The markets had priced in zero chance of an interest rate adjustment, and that was what the Federal Reserve’s FOMC delivered. Unlike the previous FOMC rate statements of the last six months, this particular decision did not elicit any market reaction as it did not constitute any market surprise. Notable actions taken by the FOMC include the hike of the Interest on Excess Reserves (IOER) as well as the overnight reverse repo rates by 5bps each.
The press conference by the FOMC Chair did not produce remarkable market-moving information. Reporters pressed Jerome Powell on a range of issues, such as monetary policy direction as well as the timetable for repo market action by the FOMC. Powell also faced questions on specifics of the repo market purchases by the FOMC.
Powell’s responses had two critical points. One was the comment on inflation; Powell said the FOMC was unhappy about the current inflation levels. He further stressed the desire of the FOMC to see the inflation rate “returning” to the 2% target. This is in opposition to previous statements where the word “near” is used in referring to rising inflation.
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While non-committal when pressed on the coronavirus issue, he stressed that the FOMC would continue its repo market operations well into the 2nd quarter of 2020.
Markets are factoring in at least one more rate cut, as Powell’s speech was perceived as having a slightly dovish twist. However, any perceived dovishness was not strong enough to cause significant volatility on the US Dollar.
Gold prices have edged higher this Thursday after the Bureau of Economic Analysis reported slower-than-expected growth in the US economy for the second quarter of 2021. The Q2 2021 US GDP (advanced) came in at 6.5% versus the consensus number of 8.5%. The slower growth also adds support to the […]
Gold price maintained the bullish momentum of the day and closed higher after the FOMC reiterated it was not in a hurry to taper the QE program. The US Dollar edged lower on the rate statement and subsequent speech by Jerome Powell, who heads the FOMC. FOMC Chief Powell maintained […]
Crude oil price on the Brent benchmark was little changed this Wednesday, following the release of crude oil inventories report that showed a drawdown of 4.1million barrels for the week ended July 23. This figure, reported by the Energy Information Administration, showed that inventories fell more than expected (-2.6m barrels). […]
The S&P 500 index is marginally higher this Wednesday, as traders sit on the sidelines to await the decision of the Federal Open Market Committee (FOMC) of the US Federal Reserve later today. Apart from a 1% move of the Communications Services index, very little is happening with other sectors. […]
The rally in gold prices continued on Thursday, following the US dollar slump and lower long-term bond yields. These events came on the back of the dovish FOMC minutes released on Wednesday, which showed several policymakers indicating that the conditions for tapering had not been fully satisfied. This allowed the […]
The Nasdaq 100 index pushed to record highs as the risk-sensitive index responded positively to the FOMC minutes, which indicated hesitancy on the part of policymakers to initiate early tapering. According to the FOMC minutes, the committee’s standard of “substantial further progress” appears not to have been met by current […]
The FOMC’s projections and comments by the FOMC chair are expected to lead US stocks lower this Thursday when the indices open in a few minutes. The S&P 500 index is set for a lower open, with Credit Suisse setting a new support benchmark for the index at 4208/4202. The […]
Following the hammer blow that the FOMC delivered to USD sellers yesterday, silver prices plummeted yet again, losing nearly 2.62% after Wednesday’s 2.64% drop. This move sent silver prices to 6-week lows post-FOMC, after the bank projected that the recovery conditions that would enable lift-off and tapering would come earlier […]
The S&P 500 index opened lower this Wednesday, as traders realign their positions ahead of the decision by the Federal Open Market Committee (FOMC) of the US Federal Reserve. Dankse Bank analysts expect the major trigger from the decision to centre around the Fed’s language in describing its plans for […]
Ahead of tonight’s FOMC decision, ECB governing council member Gabriel Makhlouf has dismissed talk of an early end to the bank’s Pandemic Emergency Purchase Programme (PEPP). Reuters quoted Makhlouf on Wednesday as saying that despite the bumpy and uneven nature of recovery, tapering of government supports will test the viability […]
