FOMC left interest rates unchanged at a meeting today, in-line with market expectations, and issued a economic projections that can be described as hawkish. GDP forecasts were boosted and core inflation forecast for 2024 as well. While median dot-plot for 2024 was unchanged at 4.60% compared to December 2023 projections, distribution of votes showed only one FOMC member opting for more than 3 rate cuts this year, while in December 5 members wanted more than 75 basis points of easing. New median for 2024 implies another 3 cuts, compared to 4 in December projections.
In spite of these rather hawkish projections, market reaction was actually dovish. US dollar dropped following the announcement, while indices and gold jumped.
EURUSD jumped following FOMC decision and climbed to a daily high. However, a big part of the move was already erased. Source: xStation5
GOLD surged above the bearish trendline and tested $2,175 area, the highest level in a week. Source: xStation5
US500 surged after Fed decision and briefly traded at fresh all-time highs above 5,250 pts mark. Source: xStation5
Daily Summary: EUR/USD tries to reverse the trend; Wall Street marks its third consecutive week of gains ๐จ
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