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Fed does not rock the boat, but only two hawkish

Rates remain unchanged and only two voting members wanted a hike, instead of three in September. Eric Rosengren changed his mind and this does not rock markets.  The Fed changed the wording from “strengthened” to “continued to strengthen” regarding raising rates, which is the smallest possible change. Going gradual is the name of the game.

The USD remains unchanged, generally weaker, on election worries, however, the moves are minimal.

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Here’s a passage regarding rates, from the official statement:

The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.

The Federal Reserve was expected to leave the interest rate unchanged in its November decision. This is  a less important meeting,  as it does not consist of a press conference nor new forecasts.  And even more importantly, Yellen and her colleagues announce their decision 6 days before the US presidential elections and would  rather wait for the outcome.

Follow the live coverage with Valeria Bednarik, Mauricio Carrillo and I:

November Fed Decision Background

The bigger question is December. Back in September, they hinted about a potential rate increase, at the one year anniversary of the first hike in a decade. A thicker hint albeit not a full commitment was projected. Three voting members dissented: Rosengren, Mester, and George. A repeat of their dissent was  on the cards.

Data since the last meeting has not changed  the picture: employment grows at the same pace, inflation is similar and growth has picked up in Q3, but that was expected.

More: US elections – all the updates

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.