Real-time News

On January 29th, Goldman Sachs analyst Kay Hay stated that given strong economic data and signs of stabilization in the labor market, the Federal Reserve is likely to maintain its current policy for the time being. However, we expect interest rate cuts to resume later this year, as the slowdown in inflation will allow the Fed to implement two more "normalization" rate cuts, bringing interest rates back to what the Federal Open Market Committee members consider a neutral level.

January 29th - Former Federal Reserve Vice Chairman Richard Clarida stated that he expects Powell to avoid the topic of the dollar during today's question-and-answer session. He said, "The Fed is trying to avoid any and all discussion about exchange rates."

January 29th - The market can pay attention to a slightly technical detail: while the entire Federal Open Market Committee (FOMC) votes on the benchmark federal funds rate, only the seven members of the Federal Reserve Board vote on the interest rate on outstanding reserves (IORB). This rate typically moves in tandem with the federal funds rate. Today, all seven board members voted to keep the rate unchanged, which is usually the norm, even if some board members dissent on the federal funds rate decision. However, there were previous concerns that board members eager to push for rate cuts might express this inclination in the IORB vote. But this did not happen today.

On January 29th, Pepperston analyst Michael Brown stated that the policy statement was largely unchanged, although the assessment of economic conditions was revised upward to reflect a "robust" pace of growth. He indicated that attention will shift to the press conference, where Federal Reserve Chairman Powell may mention that the current federal funds rate is within a reasonable range for the neutral rate, but he will likely firmly avoid any questions regarding what happens after May.

January 29th - The Federal Reserve held rates steady as expected. Following the announcement, interest rate futures contracts indicated that the probability of a rate cut in April (Powell's last meeting as Fed Chairman) was 28%, slightly lower than previously thought; while the probability of a rate cut in June rose to 64%, an increase from before, and a second rate cut this year is very likely.

U.S. natural gas futures rebounded sharply, rising more than 10%, after falling as much as 15% earlier, with the market experiencing significant volatility ahead of contract expiration.

Former Federal Reserve Vice Chairman Clarida: The 10-year yield curve is expected to steepen.

January 29th - Nick Timiraos, the "Federal Reserve mouthpiece," wrote a new article stating that the Fed kept interest rates unchanged as expected and did not specify when rate cuts might resume. In December's projections, 12 of the 19 officials expected at least one more rate cut this year to be appropriate. The answer depends on which scenario comes first: a collapse in the labor market or a confident return of inflation to the 2% target. Neither has occurred since December. Job growth has slowed significantly, but the unemployment rate has remained stable. Inflation data has become unpredictable due to statistical disruptions caused by the government shutdown. If the labor market does not weaken further, the next rate cut may not occur until after Powell's term as Fed chairman ends in May.

German Chancellor Merz: The weak dollar exchange rate has placed a considerable additional burden on Germany's export economy.

German Chancellor Merz: Europe must enhance its competitiveness to cope with the weak dollar.

The Federal Reserve's FOMC statement reiterated its long-term goals and monetary policy strategy.

The Federal Reserve's FOMC statement: Job growth remains sluggish.

The Federal Reserve's FOMC statement: Closely monitoring the risks associated with both aspects of its dual mandate.

The Federal Reserve's FOMC statement: Uncertainty about the economic outlook remains high.

After the Federal Reserve kept interest rates unchanged and two votes against, U.S. Treasury bonds remained stable.

The Federal Reserve kept the reverse repurchase rate unchanged at 3.5% and the discount rate unchanged at 3.75%.

The Federal Reserve's FOMC statement removed the statement that downside risks to employment have increased.