Fed Meeting 11/02 - Fed Leaves Rates Unchanged

The Federal Reserve, at the conclusion of its two-day FOMC monetary policy meeting, expectedly left its key lending rate unchanged at a target range of 0.25%-0.50%.

In its accompanying statement, the Fed said the case for hiking interest rates had “continued to strengthen” but that “some” further evidence of progress toward its objectives was needed before hiking rates.

Importantly, the Fed seemingly upgraded its inflation outlook, saying price pressures have “increased somewhat since earlier this year”.

Two policymakers dissented, voting instead to raise borrowing costs at this meeting, which was down from three dissents at the previous meeting.

On balance, the statement may have been less of a signal that rates will rise next month than some dollar bulls would have like to have seen. Still, it was little changed from September’s statement and given that the U.S. presidential election remains the main focus of global market participants, the dollar, equities and bonds were initially little changed as a result of the Fed’s communiqué.