The Federal Reserve announced its latest monetary policy decision today at 7:00 pm BST. Decision was not a surprise - the US central bank delivered a 75 basis point rate hike, in-line with market expectations. Such a move was expected by 86 out of 90 economists surveyed by Bloomberg. Money markets saw an over-90% chance of 75 basis point rate hike just prior to the decision announcement.
An important point to note is that the decision to hike by 75 basis points was unanimous (unlike last time when 1 Fed member opted for a smaller than 75 bp rate hike). Fed repeated in the statement that it remains highly attentive to inflation risks and noted that spending and production has softened since the last meeting. On the other hand, the Fed stressed that job gains remain robust.
As such a decision was well priced-in, it shouldn't come as a surprise that the market did not see any major reaction. S&P 500 moved slightly higher but the scale of the move did not exceed 0.2-0.3%. The US dollar weakened slightly, with EURUSD moving around 0.2% higher.
Source: xStation5
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