BREAKING: USD dips after 75 basis point Fed rate hike

7:05 PM 27 July 2022

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

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits