Fed holds rates steady, signaled readiness to adjust balance sheet normalization

The U.S. Fed maintained their dovish stance and noted they are prepared to adjust balance-sheet normalization. As expected they kept rates steady and reiterated their pledge to be patient.

Regarding the economy, the Fed noted the labor market continued to strengthen and that economic activity has been rising at a solid rate.

The US dollar fell across the board against all its major trading partners. The immediate reaction for interest rate probabilities following the release of the statement roughly saw expectations rise about 1% for each meeting, but still not fully pricing in a hike in 2019.

 

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya