FOMC Interest rate decision (FED) | News & Analysis


Fed hikes by 75 bps in July, abandons rate guidance

FED'S LAST EMERGENCY MEASURES REVIEW

FED Latest News

FED Latest Analysis


June Fed decision review

Breaking: Fed lifts interest rates by 75 bps to 1.50-1.75%, as expected

The US Federal Reserve on Wednesday announced that it had lifted interest rates by 75 bps to 1.50-1.75%, as expected. The vote split was 10 to one, with Esther George favouring a 50 bps rate hike. The US central bank said in its statement that it anticipates ongoing increases to interest rates to be appropriate, noting that it is strongly committed to returning inflation to 2.0%.


April Fed decision review

Breaking: Fed hikes by 50 bps, begins balance sheet reduction from June

The US Federal Reserve announced on Wednesday that the FOMC had agreed to raise the target range for the federal funds rate by 50 basis points to 0.75% to 1%, in line with expectations. The Fed further noted that it will begin trimming the balance sheet on June 1, starting with a $47.5 billion cap on monthly runoff and rising to $95 billion monthly after three months.

Fed Quick Analysis: Powell deals three blows to the dollar, but there is no alternative to the king Premium

The Federal Reserve has lifted its leg from the hawkishness pedal – but remains en route to "expeditious" tightening, which is set to keep the dollar bid. After a series of hawkish comments on the impact of inflation – and kicking off the presser by talking directly to the American people – Fed Powell sent the dollar higher. But, traders want to know what's next.


March Fed decision review


February Fed decision review

US Permission Granted: Retail Sales and Nonfarm Payrolls give the Fed options Premium

Consumer sentiment last month was the worst in almost a decade but depression did not keep anyone home. Consumer spending saw the largest gain in ten months. In fact, if you leave out the four months of pandemic distortion, it was the biggest single month jump in consumption in three decades. A red-hot job market and the receding pandemic seem to have blunted the damaging impact of the highest inflation in a generation.

Federal Reserve rate cycle to begin in March, markets reverse on warning Premium

The Federal Reserve kept its rate policy on schedule, indicating in its statement and Chair Jerome Powell’s press conference that it will raise the fed funds rate at the March meeting for the first time in three years. In doing so the governors refused to be distracted by January’s turbulent equity correction or preliminary signs that the US economy may be slowing, preferring their new focus on inflation.


January Fed decision review

Fed Quick Analysis: Three dovish moves boost stocks, why more could come, why the dollar could rise Premium

More dovish than hawkish market expectations – as described in the preview – and that is enough to boost stocks, extending their gains. First, despite a new and more hawkish composition, the Fed voted unanimously. There were no hawkish dissenters, showing that Powell remains in control. Second, the signal to raise rates does not include a date – "fairly soon" probably means March, but it is not a strong commitment. Third, the Fed continues printing money – no early end to its tapering scheme. That means a bit more money to support stocks.



December Fed decision review

Sponsor broker

Related Content



Related Content

Editors' Picks

EUR/USD turns south towards 1.0200 amid risk-aversion

EUR/USD turns south towards 1.0200 amid risk-aversion

EUR/USD is heading south towards 1.0200 in early Europe, as bulls failed to keep reins near the monthly high. Mounting US-China tensions over Taiwan and recession fears weigh on risk sentiment and help the dollar find demand as a safe haven.

EUR/USD News

GBP/USD tests 1.2200 as risk-off flows dominate

GBP/USD tests 1.2200 as risk-off flows dominate

GBP/USD is trading deep in red near 1.2200, as investors turn away from higher-yielding assets such as the GBP. Despite falling US Treasury bond yields, the dollar manages to gather strength amid risk aversion. US Pelosi's visit to Taiwan is the main event risk this Tuesday. 

GBP/USD News

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Gold bulls keep their sight on $1,786 amid Taiwan tensions

Gold bulls keep their sight on $1,786 amid Taiwan tensions

Gold price eases but upside remains favored amid escalating US-China tensions. The expected visit of US’ Pelosi to Taipei rattles markets amid China warnings. Gold bulls remain on track to test the critical resistance area at $1,786.

Gold News

What does the future hold for Bitcoin price as Ethereum’s ‘Merge’ narrative takes over?

What does the future hold for Bitcoin price as Ethereum’s ‘Merge’ narrative takes over?

Bitcoin price is currently retesting the 200-week SMA at $22,794, anticipating a minor bounce. There are three trade opportunities that BTC presents, two of which favor the bears.

Read more

Majors

Cryptocurrencies

Signatures


Big Picture

What's important about Federal Reserve’s monetary policy meeting?

With a pre-set regularity, a nation's Central Bank has an economic policy meeting, in which board members took different measures, the most relevant one, being the interest rate that it will charge on loans and advances to commercial banks.

In the US, the Board of Governors of the Federal Reserve (FED) meets at intervals of five to eight weeks, in which they announce their latest decisions. A rate hike tends to boost the local currency, as it is understood as a sign of a healthy inflation. A rate cut, on the other hand, is seen as a sign of economic and inflationary woes and, therefore, tends to weaken the local currency.

If rates remain unchanged, attention and also main news and analysis turn to the tone of the FOMC (Federal Open Market Committee) statement, and whether the tone is hawkish, or dovish over future developments of inflation.

What is the Fed?

The Federal Reserve System (Fed) is the central banking system of the United States and it has two main targets or reasons to be: one is to keep unemployment rate to their lowest possible levels and the other one, to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

How to trade the event?

  • Do not rely on the Fed to determine the direction of the dollar in the coming months.
  • The dollar tends to follow its predominant trend when the Fed starts to hike rates.
  • There is no direct link between the Fed hiking rates and the usd falling. When a weak usd has coincided with a Fed hiking cycle, it has been falling for some time.
  • Due to this, we may see a muted reaction to a potential Fed rate hike.

WHO IS FOMC'S CHAIRMAN?

Jerome Powell

Jerome Powell Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.



The World Interest Rates Table

The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.

FED educational resources