Investing.com | Jan 30, 2020 03:03
By Yasin Ebrahim
Investing.com - The Federal Reserve held rates steady on Wednesday, as the sluggish pace of inflation coupled with a strong labor market did little to shift the central bank's outlook on the economy.
The Federal Open Market Committee left its benchmark rate unchanged in the range of 1.5% to 1.75%.
The Fed delivered three rate cuts in 2019, the last in October and policymakers have indicated that rates will remain on hold until there is some significant change in the economic outlook.
With the U.S. labor market in good shape, boasting record-low unemployment, the Fed has identified inflation as the main driver of future policy decisions.
U.S. consumer prices ticked higher in December while monthly underlying inflation slowed, supporting the Fed’s case to keep interest rates on hold at least through this year.
Investors are now turning their attention to Chairman Jerome Powell's press conference at 2:30 PM ET (19:30 GMT) for insights into the Fed’s balance sheet policy, and whether or when it expects to withdraw repo funding.
The U.S. central bank has been buying Treasury bills of up to $60 billion a month since mid-October to steady overnight lending rates, which spiked on fears of a liquidity crunch in the short-term funding market.
But it has created the impression that the Fed is engaging in an unofficial form of the quantitative easing it used to prop up the economy in response to the global financial crisis.
The Fed has stressed that its repo funding is not a form of monetary easing, but many disagree, pointing to the expansion in the central bank's balance sheet since the launch of the operation.
Powell may also address the impact of the coronavirus on the global economy, which has come about just as trade tensions between Washington and Beijing are easing.
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.