4 min read The Federal Reserve left rates unchanged at 3.75%-4% in line with expectations. The vote was 10-2, with Cleveland Federal Reserve President Beth Hammack and Governor Lisa Cook voting to hike rates by 25 basis points.
The Fed acknowledged strong economic growth and a resilient labor market, noting that the discussions centered around inflation. The Fed wants to wait for more data before deciding its next move. US CPI is at 3.7%, and core PCE data, the Fed’s preferred inflation measure, will be released tomorrow. US Q3 GDP data will also be released tomorrow.
The Fed is expected to hike rates again in December with the move 84% priced in, this is unchanged from ahead of the meeting. Overall, the meeting brought few surprises.
Kevin Warsh announced a change in the FOMC’S meeting schedule for 2027 and 2028. While the committee will hold 8 meetings next year, one of those meetings next year will focus on monetary policy strategy.
US stocks closed modestly higher, and the USD fell after the meeting and Kevin Warsh’s commentary.
DOLLAR INDEX (DXY):
The US Dollar Index has fallen following the FOMC rate decision, pulling back from its 2-week high to 102.15. On the 4-hour charts, the price holds above the 50 and 200 EMA, keeping the outlook constructive. Buyers will look to rise above 102.50 to create a higher high. A break below the 50 EMA at 102 is needed to bring the 101.50 support zone into focus.
EURO vs DOLLAR (EUR/USD):
If we take a closer look at the technicals, we can see that EUR/USD has risen modestly following the FOMC rate decision. EUR/USD has risen from 1.1110 to 1.1160 but still remains below the falling trendline and the 50 and 200 EMA, in a bearish picture. Sellers will need to break below 1.11 to create a lower low and extend the bearish move. Buyers will look to rise above the 50 EMA and the falling trendline at 1.1185 to bring in 1.1240, the late October high.
S&P 500 (SDX):
The S&P 500 closed the session higher at 7744 following the FOMC rate decision. However, price has since fallen after Alphabet’s earnings release. On the 4-hour chart, the price recovered from the 7620 support zone and rose above the 200 and 50 EMAs to above 7760 before easing back. While the price holds above the 50 and 200 EMAs around 7700, the outlook remains constructive.
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