Fed to be "patient" with rate changes

Spot Gold Rebounds as Fed Adopts ‘Patient’ Interest Rate StanceMore

Spot Gold Rebounds as Fed Adopts ‘Patient’ Interest Rate StanceMore

"We are now facing a somewhat contradictory picture of generally strong USA macroeconomic performance alongside growing evidence of cross-currents".

But the decision comes amid volatile financial markets and a cooling US housing market.

President Trump, meanwhile, has been an outspoken critic of the Fed's interest rate hikes. Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, is scheduled to deliver his comments on the monetary policy in a press conference at 19:30 GMT.

"This marks a full 180 from what the Fed was signaling just a few months ago", said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.

Taken together, the two documents were meant to convey maximum flexibility from a central bank buffeted in recent weeks by financial market volatility and signs of a global economic slowdown.

Boeing shares added 6.3 per cent, providing one of the largest boosts to the U.S. market, after the aerospace company posted strong quarterly earnings, which beat expectations. Contracts tied to the Fed's policy rate continued to price about a one-in-four chance of a hike in 2019, and contracts maturing in 2020 were signaling a small but rising chance of a rate cut then.

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The value of the aluminium producer declined by more than half from $9.2 billion more than eight months ago. Lloyd Doggett , D-Texas, said in a statement Sunday that the agreement was a "sordid deal".

The US central bank cited muted inflation and recent economic "cross currents" to explain the shift.

The Fed made no change to the $50 billion monthly runoff of Treasury bonds and mortgage-backed securities from its balance sheet. Last year, the Fed had predicted that there would be two more rate hikes in 2019. Some traders have urged it to slow or halt its pullback from the bond markets, at least for now.

But while the market liked Powell's dovish stance, the Fed chairman warned of headwinds lurking in the economy, noting that the partial government shutdown will have impact on first-quarter GDP numbers - and adding that the impact should be corrected in the second quarter as workers receive backpay.

Intends to continue implementing policy in which ample reserves ensures monetary control is primarily exercised through setting of Fed's administered rates and active management of reserves is not required.

Job gains have been strong, on average, in recent months, and the unemployment rate has remained low.

Wall Street was already trading higher prior to the Fed decision, but surged immediately afterwards.

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