FOMC keeps rates unchanged

  • Target rate remains at 1.5% to 1.75%
  • Interest rate on excess reserves 1.6% versus 1.55%
  • The decision is unanimous
  • Fed says labor market stronger, economy rising at moderate rate
  • consumption moderate, investment and exports week
  • job gains solid, unemployment has remained a low
  • overall and core inflation running below 2%
  • Fed leaves discount rate at 2.25%
  • market-based gauges of inflation compensation remain low
  • aims for inflation returning to symmetric 2% goal
  • reiterates plan to buy treasury bills into 2nd half of 2020
  • continue to conducting Terman overnight repo operations at least through April
  • survey based inflation expectations a little changed
  • current policy appropriate to sustain expansion
  • will continue to monitor incoming data including Global developments in muted inflation pressures

Fed's Powell hold his post FOMC meeting press conference starting at 2:30 PM ET/1930 GMT.

The Fed characterized spending is more moderate compared to strong. They also listed the interest rate on excess reserves buy 0.5 basis points to 1.6% from 1.55%. This was expected in an effort to move the effective Fed funds rate more toward the middle of the 1.5% to 1.75% trading range.

Stocks have moved higher after the decision with the S&P index now up 16.4 points at 3292.67 (was up 11.79 points about 5 minutes before the release). The NASDAQ index is currently trading up 54.5 points versus up 36.77 points about 5 minutes before the release.

In the forex market,

  • The USDJPY did retest the 109.258 high price from early in the Asian session, but has backed off a bit to 109.19 currently.
  • The EURUSD is little changed
  • The GBPUSD is up about 3 to 4 pips

Chair Powell will start his press conference at the bottom of the hour. It typically lasts about an hour.

Later after the close the focus will turn toward the earnings from Microsoft, Facebook, PayPal, Tesla, et al.