12 Dec WAS THE FED MEETING REALLY A NON EVENT?
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%.