FOMC Interest rate decision (FED) | News & Analysis

If the Federal Reserve's statement was not hawkish enough – Chair Jerome Powell confirmed the upbeat stance. However, one comment on rate hikes seemed to have reversed the course of the dollar's gains, sending it down. Fed Chair Jerome Powell has said that only a significant rise in inflation would trigger a rate hike.

Following its 2-day meeting, the Federal Open Market Committee (FOMC) on Wednesday announced that it lowered the benchmark interest rate by 25 basis points to the target range of 1.75% - 2% in a widely expected decision. Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, is scheduled to deliver his comments on the monetary policy outlook in a press conference at 18:30 GMT.

Lower rates tend to weigh on the currency – but the dollar advanced. While this may be attributed to a typical "buy the rumor, sell the fact" phenomenon, there are more significant factors.

The FOMC cut rates 25 bps, and there are some indications that it is prepared to do more. That said, not all committee members are on board with further easing. Incoming data will determine what the Fed does next.

In his prepared remarks delivered at the Jackson Hole Symposium, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, said that the US economy was in a 'favorable place,’ and added that the Fed will 'act as appropriate.'

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.