As largely expected the Fed left interest rates unchanged and signaled it would keep them on hold through 2020 amid a solid economy.  The vote was unanimous, the first since May.  The Committee said “it will continue to monitor the implications of data for the economic outlook including global developments and muted inflation pressures.”  The term “uncertainties” was removed.

The FOMC repeated that economic activity has been rising at a “moderate” rate with “solid job gains” and inflationary pressures remain “muted.”

Officials also stated their policy remains supportive of growth in coming years—even with the US and China yet to reach a trade deal and Brexit’s future in question given the uncertainties of today’s vote.

There were a few generic comments about the repo market but nothing of great significance.

In my view perhaps the most significant statement was the FOMC acknowledging that 2019 was a year that many things had occurred that it did not expect.  In other words it was a year of surprises.

Wow!  The bond market views the Federal Reserve as omnipotent and omniscient.  Did FRB Chair Powell just shatter this illusion?

Generally speaking the outcome had little impact upon the markets.

Changing topics, as stated above, today is a pivotal vote on Brexit.  How will the vote be interpreted?  Will it dominate headlines?

Last night the foreign markets were up.  London was up 0.60%, Paris up 0.06% and Frankfurt up 0.11%.  China was down 0.30%, Japan up 0.14% up 1.31%.and Hang Sang

The Dow should open flat ahead of a ECB monetary policy announcement, trade and Brexit uncertainties.  The 10-year is unchanged at 1.80%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.