The US Federal Reserve maintained interest rates constant at the conclusion of its FOMC meeting a few hours ago, but forecast another rate hike by the end of the year.
Markets had generally anticipated the Fed to leave rates steady, but the modification to its planned rate decreases took them off surprise.
The main news of the day is, of course, the Fed’s announcement of another rate rise this year.
The US Federal Reserve maintained interest rates constant at the conclusion of its FOMC meeting a few hours ago, but forecast another rate hike by the end of the year. Furthermore, higher rates for a longer period of time are likely to be the new reality, with predictions showing rates decreasing just half a percentage point in 2024, compared to the full percentage point of decreases predicted at the June meeting.
Markets had generally anticipated the Fed to leave rates steady, but the modification to its planned rate decreases took them off surprise.
The largest mover of the day was the GBPUSD, which doubled as a result of the Fed decision and UK Inflation Rate Slowing Further to 1-1/2-Year Low (to 6.7% in August 2023 from 6.8% the previous month, falling short of the market estimate of 7.0%).
The GBPUSD fell from roughly 1.238 to 1.233 (after some hesitation and a spike up to 1.238 inside the first hour). Finally, the price dropped below the pre-decision (panicked?) low. The present price is barely over that level at 1.234, but the negative prospects of this pair will be closely monitored in light of this new short-term barrier.