The Fed's resilience against Trump's administration argument for cutting the interest rate could boost the dollar across the broad sending the UST yields up and gold down amid lower risk appetite.
The Fed seemed to the markets yesterday having no will to change its adopted patience stance meanwhile shrugging off the increasing expectations of having an interest rate cut by the end of this year.
The Fed has seen that the U.S. economy is slowing down but it is still strong and it has no worries about it to figure it out in its economic assessment.
The Fed's chief looked more optimistic than expected when he said during his press conference following the FOMC meeting that the signs of global economic weakness that prompted concern in March, when the Fed lowered its growth and inflation forecasts and indicated it expected no interest rate hike this year, had partially subsided.
The Fed appreciated also the current lower inflation pressure, but it was also optimistic about its outlook proposing that likely to be "transitory".
It has maintained its consideration of the labor market continued improvement which is still pushing up the labor costs and building up wages inflation pressure.
The Fed's chief underscored yesterday the U.S. central bank's strong commitment to its 2% yearly inflation goal expecting the inflation to rise eventually over time and should it persist below this target, to address it.
The Fed's chief Jerome H. Powell tried to be more obvious about the Fed's current stance by saying they don’t see a strong case for moving in either direction.
The conclusion we have got yesterday from that meeting that the Fed is still courageous enough to refrain from cutting rates or sending signal about coming cutting rates, despite Trump's demands, the equities markets participants' speculations, the weaker pace of economic expansion and lower inflation rates.
The Fed's assessment came yesterday, after PCE core figure which is the Fed's favorite inflation barometer has shown in the beginning of this week yearly rising in March by only 1.6% scoring its weakest rate or rising since February 2018.
After the U.S. GDP figure released last Friday showed an annual growth rate of 3.2% in the first quarter, beating the median forecast of 2% expansion, following growth by 2.2% in the last quarter of last year.