Fed Meeting Today: Interest Rates Unchanged at 5.50%. Powell’s Press Conference Live

The Fed Meeting and Interest Rates Decision

The Federal Reserve held its meeting today and decided to keep interest rates unchanged, in line with expectations.
All eyes are now on the statements of the Fed chairman, as market participants are looking for any hints supporting the expectations of a possible rate cut in September.
The live updates from Powell’s press conference are as follows:

Economic Outlook and Inflation

In the statement released after the meeting, the Fed highlighted that the US economy remains strong, while the unemployment rate is increasing but still at relatively low levels.
Regarding inflation, the statement mentions that although it has moderated over the past year, it remains somewhat elevated.
The members of the board noted that there has been further progress towards the Committee’s 2 percent inflation target in recent months.

Future Rate Cut Considerations

While the risks to achieving the Fed’s objectives are now more balanced, there is still uncertainty about the economic outlook.
Powell emphasized that the Committee does not expect it to be appropriate to lower the target range until there is greater confidence that inflation is moving sustainably towards 2 percent.
The last time the US central bank adjusted interest rates was in July 2023, when they raised them by 25 basis points to a range between 5.25% and 5.5%, the highest level in the past 23 years.

Powell’s Insights and Market Reactions

During the press conference, Powell mentioned that the pace and timing of rate cuts will depend on the economic conditions.
He highlighted the dilemma of acting too soon, which could jeopardize progress on inflation, or waiting too long, risking the recovery.
Powell also discussed the current labor market situation and inflation dynamics, underlining the Committee’s commitment to achieving its inflation target.

Market Response and Policy Implications

Following the Fed’s decision to keep rates steady, the EUR/USD pair resumed its downward trend.
The bond yields softened in anticipation of potential rate cuts in September.
US stocks opened higher, with the S&P 500 and Nasdaq showing significant gains.
Powell’s cautious approach and emphasis on data-driven decisions have influenced market sentiment and expectations for future policy adjustments.

In conclusion, while the Fed’s decision to maintain interest rates reflects confidence in the economy, the path towards a rate cut remains dependent on incoming data and inflation trends.
Powell’s insights and the Committee’s assessment of economic conditions will continue to guide future monetary policy actions.
Stay tuned for further updates on the Fed’s policy stance.