Last night’s Fed announcement went as expected. Powell and co. played down the risks of higher than targeted inflation, and also confirmed explicitly that the central bank needed to see further progress within the US labour market to meet its objective. The statement and press conference offered very little new insight into the Fed’s thinking. The main takeaway from last night’s announcement is that they need to see maybe 2 – 3 more solid jobs reports before beginning to taper asset purchases.
The greenback came out of last night’s event a little softer. GBPUSD is back above the $1.39 handle with the euro is carving its way back towards the $1.19 figure. Stocks remain firm while the bond markets caught a bid on the back of the ‘lower (interest rates) for longer’ mentality.
Today’s session sees a focus on US Q2 GDP reading due out at lunchtime. We’ll also observe German unemployment data, the minutes from the last ECB meeting earlier this month, and US pending home sales.
Have a good day.
Written by Viv Savani. 8:25am, July 29th 2021
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