- Fed lowers the target range for fed funds rate steady at 2% - 2.25%.
- Two members vote to keep the rates unchanged in July.
- US Dollar Index jumps above fresh two-month high above 98.20.
Following its 2-day meeting, the Federal Open Market Committee announced that it lowered the benchmark interest rate by 25 basis points to the target range of 2% - 2.25% 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 in a press conference at 18:30 GMT.
With the initial reaction, the US Dollar Index gained traction and rose to its highest level since May 2017 at 98.42.
Key highlights from the press release (via Reuters)
"Cuts target interest rate by 25 basis points to 2.00-2.25%, citing implications of global developments for the US economic outlook and muted inflation pressures."
"Will conclude reduction of its aggregate security holdings in August, two months earlier than previously indicated."
"Will roll over at auction all principal payments from its holdings of Treasury securities and reinvest all principal payments from agency debt and agency mortgage-backed securities received each month."
"Principal payments from agency debt and agency mortgage-backed securities up to $20 billion per month will be reinvested in Treasury securities to roughly match maturity composition of outstanding Treasury securities."
"Vote in favor of policy was 8:2, George and Rosengren dissented because they preferred to maintain the target rate at 2.25-2.50%."
"Rate cut supports Committee's view that sustained economic expansion, strong labor market and near-target inflation are the most likely outcomes but uncertainties remain."
"As it contemplates future path of fed funds rate it will continue to monitor incoming information and will act as appropriate to sustain expansion."
"Household spending growth has picked up, but business fixed investment growth has been soft and inflation compensation measures remain low."
"Lowers interest on excess reserves rate to 2.10%."
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