Fed’s FOMC Votes 8-0 to Leave Fed Fund’s Rate Unchanged
$DIA, $SPY, $QQQ, $RTUX, $VXX
The FOMC left the benchmark interest rate unchanged, and reiterating their plan to gradually lift borrowing costs to keep the economy expanding at a healthy pace.
Economic activity has been “rising at a strong rate,” and the unemployment rate “has stayed low,” the FOMC Committee said Wednesday in a statement.
“Household spending and business fixed investment have grown strongly.”
The FOMC said it expects that “further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the committee’s symmetric 2 percent objective,” repeating language from its June statement.
Fed Chairman Jerome Powell is trying to nurture the 2nd longest US expansion on record by slowly reducing the amount of support that monetary policy provides to growth. The economy is riding a tailwind from tax cuts and higher federal spending, though a trade war threatens to dent growth.
The FOMC described risks to the outlook as “roughly balanced,” and restated that “monetary policy remains accommodative” while leaving the target range for its benchmark policy rate at 1.75 to 2%.
Most Fed officials in June projected up to 4 rate hikes for Y 2018, implying 1 or 2 more moves this year.
Mr. Powell’s next planned media briefing to follow the FOMC’s gathering on 26 September.
Fed policy makers weighed their action against a generally positive backdrop.
The US economy grew at a 4.1% pace in Q-2, its fastest pace since Y 2014. Inflation is close to the Fed’s 2% goal, rising at 2.2% for the FY ending June, while the core rate that excludes food and energy was up 1.9%
Wednesday’s decision was unanimous 8-0.
Voting members shifted chairs at this meeting, with John Williams voting for the 1st time as New York Fed President and FOMC Vice Chairman, with Kansas City Fed chief Esther George taking his place as an alternate for San Francisco while it seeks a new President.
Wednesday, the major US stock market indexes finished at: DJIA -81.37 at 25333.82, NAS Comp +35.50 at 7707.29, S&P 500 -2.93 at 2813.10
Volume: Trade on the NYSE came in at 792-M/shares exchanged
- NAS Comp +11.6% YTD
- Russell 2000 +8.7% YTD
- S&P 500 +5.2% YTD
- DJIA +2.5% YTD
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