Nobody was surprised that the FOMC held rates steady this afternoon. Inflation remains elevated, while the labour market remains strong, leaving the FOMC to remain on the sidelines.
The Press Conference.
There were questions about the impact of the wide array of executive orders streaming from the White House on the Federal Reserve’s (Fed) decision making. Chairman Powell generally responded by saying the Fed was assessing the impact of the various policies and would look at the data to guide their decision making.
As a sign that this was one of the most boring FOMC decision dates in years, yields finished the day roughly where they were before the announcement (they did pop up a few bps prior to the press conference before recovering).
Implications.
Like the Fed, the direction in yields will be driven by future data.
Interesting Observation.
Unlike the Bank of Canada’s press conference, which was dominated by the impact of tariffs, there were few questions about this topic directed to Chairman Powell, suggesting that folks in the US do not see the issue as particularly meaningful to inflation or growth.
