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The Fed maintains fed funds rate at 2.25%-2.50%

Published 01/30/2019, 02:02 PM
Updated 01/30/2019, 02:02 PM
© Reuters.  The Fed maintains fed funds rate at 2.25%-2.50%
  • The Federal Open Markets Committee keeps the federal funds rate at 2.25%-2.50%, as had been widely expected.
  • Introduces "patient" into its monetary policy statement.
  • U.S. stock averages move up--Dow +1.4%, Nasdaq +1.5%, and S&P 500 +1.1%.
  • 10-year Treasury price rises, and the yield, which had been as high as 2.734% before the announcement, falls to 2.708%; (TLT -0.3%), (TBT +0.6%).
  • "In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," it says.
  • Many economists interpret the FOMC members' recent comments on patience to mean that the fed funds rate will stay where it is until at least June.
  • Just as important, the statement removes language that further gradual rate increases would be consistent with continued economic growth.
  • The FOMC still sees sustained economic expansion, inflation near its 2% objective, and strong labor market conditions as the most likely outcomes.
  • Last year, the Fed increased the federal funds rate four times, with the last 25-basis-point hike bringing the rate to 2.25%-2.50% on Dec. 19, 2018. It's raised interest rates nine times in all since late 2015.
  • Previously: JPMorgan (NYSE:JPM) sees Fed allowing $1T of excess reserves (Jan. 30)
  • ETFs: IEF, PST, IEI, VGIT, UST, DTYS, TYO, GSY, SCHR, TBX, TYD, ITE, DTYL, HYDD, DFVL, TYNS, DFVS


Original article

Latest comments

The Fed maintains fed funds rate at 2.25%-2.50%...... what about after midterm elections??....LOL
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