BAL 
$61.00  0.29%  
CANE 
$12.17  1.07%  
JO 
$54.00  1.22%  
NIB 
$36.29  1.65%  
IEF 
$91.62  0.75%  
^UGA-IV 
$72.84  0.61%  
UNG 
$14.22  4.53%  
USO 
$81.58  0.06%  
FXA 
$63.82  0.23%  
FXB 
$119.69  0.01%  
FXC 
$70.96  0.07%  
FXE 
$98.11  0.12%  
FXF 
$97.50  0.14%  
FXY 
$60.06  0.64%  
UUP 
$28.89  0.17%  
CORN 
$19.74  0.90%  
SOYB 
$24.77  0.56%  
WEAT 
$5.33  0.47%  
JJC 
$19.56  1.24%  
GLD 
$219.57  1.24%  

FOMC: Federal Reserve Holds Steady

FOMC

Federal Reserve Holds key interest rate at 5.25-5.5% Amid Economic Growth and Inflation Concerns

FOMC Federal Reserve

The Federal Reserve has chosen to keep interest rates unchanged, continuing its measured approach to monetary policy. The move comes as the central bank grapples with the challenge of taming inflation.

The Federal Open Market Committee (FOMC) opted to maintain the benchmark rate within a range of 5.25% to 5.5%, signaling a commitment to stability.

This decision arrives amidst a surge in Treasury yields to multi-year highs, which has played a significant role in tightening financial conditions. Notably, Fed Chairman Jerome Powell acknowledged the influence of these higher yields in a speech delivered on October 19th at the Economic Club of New York.

“Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening,” Powell stated.

Keeping in Line with Expectations:

Economists and analysts have pointed out that the recent spike in long-term Treasury yields is roughly equivalent to four 25-basis-point rate hikes. However, the Federal Reserve is confronted with a delicate balancing act. While they strive to contain inflation, they must also navigate a rapidly expanding economy that poses its own risks. Recent indicators point to a robust pace of economic growth in the third quarter, with the U.S. economy surging to a 4.9% growth rate. This marked the most substantial quarterly expansion in nearly two years, driven heavily by consumer spending. However, reports and data show that spending is coming in the form of increased consumer credit card debt. 

The Federal Reserve, while maintaining its bias towards tightening, reiterated the need to carefully assess the appropriate level of policy adjustments. This assessment will take into account the impact of past rate hikes on economic activity and inflation, among other factors.

In their previous meeting in September, Federal Reserve members maintained their forecast of one more rate hike this year while adjusting their projection for next year. They reduced the anticipated number of rate cuts from four to two, reflecting a shifting landscape and the evolving challenges the Federal Reserve faces in maintaining a balanced economy. 

Market Updates

Sign up for our free, real-time market data updates from market moving reports

Name(Required)