Fed Holds Rates Amid Strong Job Growth. The Federal Reserve noted strong job gains and ongoing economic expansion but highlighted persistent challenges in tackling inflation, opting to leave interest rates unchanged at 5.5% and pushing back against expectations for rate cuts as previously signaled. The Federal Open Market Committee (FOMC) acknowledged the ongoing struggle against inflation, citing a “lack of further progress,” which reverberated through markets, causing shockwaves.
Following the Fed’s decision, the US dollar retreated across forex markets, with the dollar-yen pair slipping 0.2% to hover around 157.40. Conversely, the euro-dollar pair gained ground, trading within the range of $1.0690 to $1.07. Meanwhile, gold prices surpassed $2,300 per ounce after earlier struggles earlier in the week.
The Fed’s statement emphasized ongoing economic expansion with solid job gains but also noted persistent inflationary pressures in recent months. The decision to maintain the benchmark interest rate at the current level was widely anticipated by investors. Fed Holds Rates Amid Strong Job Growth.
Market confidence was shaken by the indication that anticipated rate cuts might not materialize soon. Investors now expect Fed policymakers to maintain interest rates during the next meeting in June. Some analysts are projecting a rate cut as late as November 7, just two days after the Presidential Election, underscoring the uncertainty surrounding future monetary policy decisions.
