Site icon Algonquin Capital

FOMC Meeting – Dissent Amongst The Ranks

Chairman Powell clearly prefers to be remembered as ‘Too Late Powell’ rather than as ‘Push Over Powell’, as the FOMC held the policy rate steady at 4.25-4.50%.    The meeting marked the first time since December 1993 that two committee members dissented from the vote.

The press release.

The details in the press release were similar to their June statement.  But there was a slight dovish slant to the wording change: from ‘economic activity has continued to expand at a solid pace’ to ‘activity moderated in the first half of the year’.

The press conference.

During the press conference, Chairman Powell struck a different tone, pushing back on any notion that the FOMC was close to easing.

The implications.

The majority of FOMC members are waiting for a clear signal that the economy is slowing enough to restrain inflation without the need for higher rates.   As such, bond traders have pushed rate cuts further out in time, resulting in yields backing up 5 to 6 bps.

Share this...
Email
Linkedin
Exit mobile version