The market welcomes the Fed's statement

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Fed Nouvelles

Inflation,Interestrate,Unitedstates

The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling.

The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed. The key points to note from the statement, are that the Fed sess progress on inflation stalling. However, the statement also added that progress towards reaching the Fed’s employment and inflation targets are in better balance than they were a year ago.

The Fed gives with one hand and takes away with another – they have sounded concerned about current inflation levels, at the same time as slowing the pace of QT, slowing the pace of Treasury sales to reduce the size of their balance sheet. This could ease some of the upward pressure on Treasury yields, and could be a blessing to the Department of the Treasury as they try to sell an eye-watering amount of US debt.

 

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