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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.
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 price is lower on the day after some belated USD strength following the announcement of a new inflation targeting strategy by the FOMC Chair, Jerome Powell. In his prepared statement which was delivered at a virtual session of the annual Jackson Hole Symposium, FOMC Chairman Jerome Powell announced a new […]
The US Dollar is being offered across the board, as the FOMC Chairman Jerome Powell, has announced a new inflation targeting strategy. This new inflation targeting mechanism will see the Fed continuing to use 2% as its targeted level. Still, the Fed would be prepared to target moderate shifts above […]
Yesterday’s FOMC minutes triggered a positive response on the US Dollar leading to broad-based buying on the greenback. This allowed for a retracement pullback on many USD-based pairs which were heavily overextended. The USDCHF was one of such pairs, and after several weeks of an extended selloff, the USDCHF recovered […]
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The USD has weakened modestly against gold, sending gold price higher towards the 1968.50 mark after the FOMC left the key Federal Funds rate unchanged at the 0.25% maximum rate a few minutes ago. In the accompanying statement, the Fed has said that it will be ready to deploy more […]
June's pending home sales declines from May's figures, showing that the US economy is very far from recovery. Sign up to see our analysis of the USD Index.
The Q2 2020 Australian Inflation data is due out on July 29 at 01:30 GMT. The expectation is for a steep drop from 0.3% in Q1 2020 to -2.0%
According to data from the Conference Board, US Consumer Confidence for July 2020 weakened to 92.6, down from June’s 98.3 reading. This figure was also weaker than market expectations of 94.0, which shows how downbeat consumers were in July as the US economy continues to flounder in the face of […]
With euro zone's inflation data and Fed Chairman’s Powell’s speech scheduled today, will we see volatility on EURUSD pick up?