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. 


FOMC Preview and Implications for the EUR/USD Price

The EUR/USD price is little changed today as traders wait for the Fed interest rate decision and the US durable goods data that will come out later today. The EURUSD is trading at 1.2165, which is in the same range where it was yesterday.  FOMC preview: The FOMC will conclude […]

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Poor Retail Sales Data Pressurizes Dow Jones Ahead of FOMC

The Dow Jones Industrial Average is down by 0.2% this Wednesday ahead of the FOMC decision. The US markets came under pressure after disappointing retail sales data. Retail sales came in at -1.1% for the month of November, which was lower than the -0.3% market expectation and also much lower than […]