FOMC Meeting Reversed Bullish Expectations that Began Yesterday – Stocks Get a Boost
FOMC Meeting Reversed Bullish Expectations that Began Yesterday – Stocks Get a Boost
FOMC Meeting Reversed Bullish Expectations that Began Yesterday – Stocks Get a Boost
However, the statement given by chair Powell seems to have convinced the market that the Fed is still on track to cut rates as previously believed. From Powell’s statement it would seem that not much has changed.
He did mention that inflation had been higher than expected this year, and that the inflation rate had “shown a lack of progress”. For expectations he mentioned that they seemed stable, which may be read as a dovish statement.
As always, he restated that decisions on rate cuts would depend solely on the data. Explaining that so far, despite a reduction in GDP growth, the economy was still expanding, and employment remained strong.
Concerning the Fed’s balance sheet, Powell stated that they would continue with reducing their holdings, yet at a slower pace than previously mentioned. This could give treasury notes some room to rally as a large selling volume leaves the market.
The stock market got a boost once Powell started speaking and didn’t look back. The Nasdaq rose from 17447 to 17678 in the space of 30 minutes, or 1.32%. On the day most major indices are up, the DJI is up 1.24%, the S&P 500 is up 1.02% and the Nasdaq is up 1.58% on the day.
While the US dollar took a beating with the change of heart on the Fed monetary policy. The DXY dropped 53 points, or 0.5%, in the first 50 minutes after the interest rate announcement. The yen managed to regain some ground against the dollar and rose to 157.00 at one point.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals