Fed leaves door open
The tone of the statement that accompanied yesterday’s Federal Reserve decision just barely bordered on optimism. To no great surprise, the key rate remained unchanged, but the Fed noted that near-term risks have diminished and the strength of the job market and household spending is encouraging. Current and projected inflation nevertheless remains below the magic threshold of 2%. The Fed is therefore leaving itself wiggle room for the fall. Markets continue to call for a close to 50% chance of a rate hike by December. Tomorrow’s GDP reading and next Friday’s job data will therefore be of vital importance.
The main news today will come to us once again from south of the border, with Initial Jobless Claims, which could give a boost to a greenback that has lost some ground since the Fed’s announcement. Certain investors probably took the opportunity to secure profits, applying downward pressure on the USD.
