• Fed keeps interest rates unchanged.
  • Moderation in the asset purchases program “may soon be warranted.”
  • USD/CAD is seesawing around a 40 pip range.

The USD/CAD is slumping to three-day lows, below 1.2700 following the Federal Reserve’s interest rate decision just released. Firstly the pair rose to 1.2760, then dipped to around 1.2694 is currently sitting at 1.2767down 0.64%, at the time of writing.

Key takeaways from Summary of Economic Projections

"Fed policymakers see a first rate hike in 2022: median forecast in Summary of Economic Projections."

"Half of Fed policymakers see lift-off in fed funds rate from zero in 2022, vs. 7 of 18 in June forecast; all but one see liftoff by end-2023 (vs. 13 in June)."

"Fed's median view of fed funds rate at end-2022 0.3% (prev 0.1%)."

"Fed's median view of fed funds rate at end-2023 1.0% (prev 0.6%)."

"Fed's median view of fed funds rate at end-2024 1.8%."

"Fed's median view of fed funds rate in longer run 2.5% (prev 2.5%)."

"Fed sees year-end US jobless rate at 4.8% in 2021 (prev 4.5%), 3.8% in 2022, 3.5% in 2023; 3.5% in 2024; median long-run forecast at 4.0% (prev 4.0%)."

"Fed sees PCE inflation at 4.2% in 2021 (prev 3.4%), 2.2% in 2022, 2.2% in 2023; 2.1% in 2024."

"Fed sees Core PCE inflation at 3.7% in 2021 (prev 3.0%), 2.3% in 2022, 2.2% in 2023; 2.1% in 2024."

"Fed policymakers see inflation running higher than 2% goal through end-2024: median forecast in Summary of Economic Projections."

Focus on Powell press conference

Next is the Fed’s Chairman Jerome Powell press conference. Firstly will read the monetary policy statement followed by the Q&A session.

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