Fed rate decision today markets reaction: Fed holds rates steady: here’s how markets react – S&P 500 hits record, Nasdaq rises, Dow flat, Treasury yields up, US dollar rebounds, and USD/JPY gains
Today’s Fed Meeting: Federal Reserve Keeps Rates Steady After Policymakers’ 10-2 Vote
The Fed made its decision after a two-day meeting in which policymakers voted 10-2 to maintain the current interest rate. Fed Governors Christopher Waller and Stephen Miran voted against the decision, and both called for a quarter-point cut in the interest rate.
Fed Interest Rates and Inflation: Why Don’t Interest Rates Change?
“Economic activity is expanding at a solid pace,” the Fed said, noting that the employment market “shows some signs of stabilization,” as quoted by Reuters. The Fed’s decision came after the unemployment rate fell to 4.4% in December.
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Fed Interest Rates Today: Impact on the Labor Market and Unemployment
Fed policymakers removed language that said downside risks to employment were increasing and signaled less concern about a sharp slowdown in the labor market, according to a Reuters report. The Fed emphasized that inflation “remains somewhat elevated” and that future rate adjustments will depend on incoming data and the economic outlook.
Market Reaction to Fed Decision: US Dollar and Treasury Yields Responded
Market reaction to the announcement was muted. According to the Fxstreet report, the US Dollar continued to receive support as the Dollar Index (DXY) traded around 96.70 after recently falling to four-year lows. The Japanese Yen remains under pressure, with USD/JPY consolidating near 153.92, up around 1% on the day.
Impact of Fed Decision on US Stock Markets Today: S&P 500, Nasdaq and Dow Movements
Following the Fed’s decision, mixed movements were seen in stock markets. The S&P 500 hit an intraday record high of 7,002.28 before pulling back, while the Nasdaq Composite rose 0.3% and the Dow Jones Industrial Average remained near the flat line, according to a CNBC report. Treasury yields rose, reflecting investor expectations aligning with the Fed’s economic outlook.Also read: Data analyst husband gets laid off every year, wife thinks he’s chosen a tough career – The Internet comes into play
Jerome Powell’s Comments on Current Monetary Policy
“I think, and many of my colleagues also think, that it’s hard to look at the data coming in and say that policy is significantly restrictive right now,” Fed Chairman Jerome Powell said during the press conference, as quoted by CNBC.
The Fed reaffirmed that all future policy decisions will remain data-driven, remaining committed to supporting maximum employment while aiming to return inflation to its 2 percent target.
Powell’s Speech Today: Commitment to 2% Inflation Target and Maximum Employment
“Having reduced our policy rate by 75 basis points over our previous three meetings, we see that the current stance of monetary policy is appropriate to promote progress toward both our maximum employment and 2% inflation goals,” Powell said, according to Reuters.
FAQ
What decision did the Fed make today?
The Fed kept its benchmark interest rate in the range of 3.50%-3.75% after a 10-2 vote.
Why didn’t the Fed cut interest rates?
The Fed announced that it did not change interest rates due to strong economic growth and persistently high inflation.
