Richard Perry
Independent Analyst
So, nothing really to go on from the FOMC then. No rate hike (as expected) but also little in the way of hints over a potential rate hike. Perhaps we could focus on the tweak “some” further improvement in the labor market, however the Fed has been going on for some time about the labor market, so we know that it is largely a ticked box when it comes to the dual mandate. So it will now be focus on the progress of inflation (i.e. the other part of the dual mandate) which will be important in the coming weeks. The first indication will be the core Personal Consumption Expenditure on Monday. The fact that the Fed sees the commodity prices movements as “transitory” could also be taken as marginally hawkish. The markets gave the FOMC a cursory glance, with a slight impact of dollar strength, but nothing to get too worked up about.
Interestingly, commodities hardly reacted at all in US trading hours, but as the Europeans have taken over the gold price is coming under fire once more.
Wall Street closed higher with the S&P 500 up 0.7%, and although Chinese equities continue their volatility, Asian markets were also slightly higher (Nikkei +1.0%). European markets have opened marginally higher. In forex trading, there is a slightly positive outlook for the dollar as the European trading takes over.
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