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“Economic activity has continued to expand at a solid pace,” the central bank’s rate-setting Federal Open Market Committee said at the end of a two-day policy meeting in which officials lowered the benchmark overnight interest rate to the 4.50%-4.75% range, as widely expected. The decision was unanimous.
In a press conference after the announcement, Fed Chair Jerome Powell said Tuesday’s election in which Republican Donald Trump was elected president, will have no effects on policy decisions in the near term. He also said some of the downside risks to the economy have diminished amid stronger economic data.
MARKET REACTION:
STOCKS: The S&P 500 (.SPX), opens new tab extended a gain to 0.81% after the news
BONDS: The yield on benchmark U.S. 10-year notes eased to 4.3355%. The 2-year note yield rose to 4.2139%
FOREX: The dollar index was little moved -0.69% with the euro up 0.62%.
COMMENTS:
HELEN GIVEN, ASSOCIATE DIRECTOR OF TRADING, MONEX USA, WASHINGTON D.C.
“Overall, a very cautious decision that doesn’t give us much to go on when looking ahead to December. Powell may give more concrete clues in his presser but I’m expecting we’ll hear about “data dependence” a lot.”
