FOMC Interest rate decision (Fed) | News & Analysis


Fed raises rates by 25 bps despite banking turmoil

LATEST FED MEASURES TO BATTLE INFLATION

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January Fed decision review


December Fed decision review

Fed Quick Analysis: Buy the dip? Why markets set to dodge the dots Premium

This is the "end of the beginning" in the war against higher inflation – yet markets will likely see the beginning of the end, as they are always looking forward. The Federal Reserve has raised rates by a double-dose of 50 bps, below the four triple-dose 75 bps hikes. While borrowing costs are still rising, hopes for them falling are rising.



October Fed decision review

Breaking: Fed hikes policy rate by 75 bps to 3.75-4% as expected

The US Fed on Wednesday announced that it raised the policy rate, federal funds rate, by 75 bps to the range of 3.75-4% following the November monetary policy meeting. This decision came in line with the market expectation. The dollar came under renewed selling pressure and the US Dollar Index declined below 111.00 with the initial reaction.


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EUR/USD rises toward 1.0800 as USD weakens

EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.

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GBP/USD closes in on 1.2300 as mood improves

GBP/USD closes in on 1.2300 as mood improves

GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.

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Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk

Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk

BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.

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Gold extends slide below $1,950 as US yields rebound

Gold extends slide below $1,950 as US yields rebound

Gold price has extended its daily slide and dropped below $1,950 in the early American session. Amid easing fears over a global banking crisis, the benchmark 10-year US Treasury bond yield rebounded above 3.5% on Monday, weighing heavily on XAU/USD.

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Four reasons why SUSHI holders will have a bullish week despite SEC's move

Four reasons why SUSHI holders will have a bullish week despite SEC's move

SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.

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Big Picture

What's important about Federal Reserve’s monetary policy meeting?

With a pre-set regularity, a nation's Central Bank has an economic policy meeting, in which board members took different measures, the most relevant one, being the interest rate that it will charge on loans and advances to commercial banks.

In the US, the Board of Governors of the Federal Reserve (FED) meets at intervals of five to eight weeks, in which they announce their latest decisions. A rate hike tends to boost the local currency, as it is understood as a sign of a healthy inflation. A rate cut, on the other hand, is seen as a sign of economic and inflationary woes and, therefore, tends to weaken the local currency.

If rates remain unchanged, attention and also main news and analysis turn to the tone of the FOMC (Federal Open Market Committee) statement, and whether the tone is hawkish, or dovish over future developments of inflation.

What is the Fed?

The Federal Reserve System (Fed) is the central banking system of the United States and it has two main targets or reasons to be: one is to keep unemployment rate to their lowest possible levels and the other one, to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

How to trade the event?

  • Do not rely on the Fed to determine the direction of the dollar in the coming months.
  • The dollar tends to follow its predominant trend when the Fed starts to hike rates.
  • There is no direct link between the Fed hiking rates and the usd falling. When a weak usd has coincided with a Fed hiking cycle, it has been falling for some time.
  • Due to this, we may see a muted reaction to a potential Fed rate hike.

WHO IS FOMC'S CHAIRMAN?

Jerome Powell

Jerome Powell Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.


The World Interest Rates Table

The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.

FED educational resources