The US Dollar is gaining broadly after the FOMC opted to leave rates unchanged at 0.25%. Additionally, the Fed is committing to use the “full range of its tools to support the economy”. Purchases of $40 billion worth of agency-backed securities and $80 billion a month in US government bonds will […]
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.
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 […]
Ahead of tomorrow’s FOMC decision, the gold price on the XAUUSD chart has moved 1.2% to the upside at the time of writing. This move offsets yesterday’s losses but keeps gold price action within the range formed by the last three trading sessions’ price action. This range sees 1850.78 retaining […]
Sign up to find out why the USDJPY is tanking ahead of the FOMC decision.
Sign up to find out the implications of the BoE and FOMC meetings on the GBPUSD in the midst of Brexit problems.
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 […]
Sign up to see how the FOMC Chair’s speech is affecting the S&P 500 index.
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 […]