U.S. Federal Reserve (FED) Interest Rate Decision
The U.S. Federal Reserve (FED) is the central banking authority of the United States. It is comprised of members of the Board of Governors of regional U.S. FED branches. The FED meets periodically every five to eight weeks throughout the year to discuss the state of the U.S. economy. Employment, growth, inflation and the lending environment are topics formally addressed at FED conferences.The FED is commissioned with the task of managing U.S. monetary policy. This includes the setting and revising of interbank lending rates for the USD. In order to accomplish this objective, FED members vote on whether rates are to be raised, remain unchanged, or lowered at each meeting. A decision is then reached and announced to the public.A rate raise, or “hike,” is a signal of tightening monetary policy amid inflationary pressures. Rate hikes typically strengthen the USD against other major global currencies. Conversely, holding rates steady or cutting rates is a signal of “dovish” policy. These actions commonly lead to the USD weakening and devaluation across the majors.
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