In a prepared speech delivered on Wednesday, “the risk of inflation staying higher for longer must now be weighed against the risk that an overly restrictive stance of monetary policy will lead to a greater slowdown in activity than is needed to restore price stability,” said Federal Reserve Bank of Boston President Susan Collins.
In an interview with Bloomberg, New York Federal Reserve President John Williams mentioned that inflation is moving in the right direction. Regarding the September FOMC meeting, he said he needs more data before deciding.
Analysts at Wells Fargo have moved up the commencement of interest rate cuts from the Federal Reserve from May 2024 to March. They look for the FOMC to cut rates by 225 basis points next year.
"Proceed carefully" – these words have meant a different thing today. The Fed may raise rates more slowly, but the same logic works for rate cuts. That scares investors, and more may be in store. While the Fed left interest rates unchanged, it went beyond leaving the door open to another increase this year.
Federal Reserve Chairman Jerome Powell held a news conference to explain why they have decided to leave the policy rate, federal funds rate, unchanged at the range of 5.25-5.5% at September FOMC meeting and responded to questions.
Please make it stop – that is what investors must feel in response to the seemingly endless tightening cycle. The Federal Reserve has only gently pushed back against markets by indicating calling for patience and stressing the importance of data.
The US Fed announced on Wednesday that it raised the policy rate, federal funds rate, by 25 bps to the range of 5.25-5.5% following the July policy meeting. This decision came in line with the market expectation. In its policy statement, the Fed reiterated that policymakers will continues to assess additional information and the implications for the policy.
The US Federal Reserve (Fed) announced on Wednesday that it raised the policy rate, federal funds rate, by 25 basis points to the range of 5-5.25% following the May policy meeting. This decision came in line with the market expectation.
The US Federal Reserve (Fed) announced on Wednesday that it raised the policy rate, federal funds rate, by 25 basis points to the range of 4.75-5% following the March policy meeting. This decision came in line with the market expectation.
The beginning of the end of the fight against inflation – that has been the Federal Reserve's message while it has raised rates by 25 bps. Investors willfully ignore the bank's forecasts for ending 2023 with rates above 5% – no change from December.
EUR/USD came under renewed bearish pressure and fell to its lowest level since March below 1.0550 on Wednesday. The US Dollar (USD) preserved its strength following the better-than-expected US Durable Goods Orders data, not allowing the pair to stage a rebound.
GBP/USD struggles to erase its losses and trades near the multi-month low it set below 1.2150 mid-week. The persistent US Dollar (USD) strength despite a modest improvement seen in risk mood limits the pair's rebound, while markets keep a close eye on political developments in the US.
A potential US government shutdown that could start October 1st looms, the chances of which are more or less seen as a coin flip at this point. Should a shutdown transpire, there could be a negative impact of the US Dollar.
Gold price finds it difficult to stage a rebound after dropping to a monthly low below $1,900 on Wednesday. The benchmark 10-year US Treasury bond yield holds steady near the multi-year high it set above 4.5%, making it difficult for XAU/USD to shake off the bearish pressure.
Bitcoin price has been malleable to the short-term holder movements. A large spike in profits for short-term holders is almost always met by a correction in BTC.
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.
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.
Fed official website, on Twitter and Facebook
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.
Jerome Powell Fed's Profile and Wikipedia
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.
