4 min readThe Federal Reserve has decided to keep interest rates unchanged at 4.5%, which was in line with expectations. However, the Fed has changed their outlook going forward and now have adjusted their forecast target between 4.25% – 4.5%. This announcement to keep rates flat and unchanged suggests a more hawkish bias from the Fed going forward as they await more data and clarity on Trump’s policies.
The more hawkish stance from the Fed comes as policymakers see inflation ending 2025 at 2.5%, up from 2.1% previously forecast and unemployment at 4.3% down from 4.4% previously expected.
DOLLAR INDEX (DXY):
Post the release of the rate decision, we have seen the Dollar Index rise 0.3%, which has correlated to a 0.3% increase in EUR/USD.
EURO VS DOLLAR (EUR/USD):
If we take a closer look at the technicals, we can observe how price was trading just below 1.04240 before the decision, and post the decision we have seen price action fall further towards the 1.04000 region. Marking a significant break in structure to the downside.
S&P 500 (SDX):
The S&P 500 has also seen a direct impact from this Fed rate announcement, as we saw the price trading at just over $6,072.00 before the announcement, and currently we are trading just above $6,000. Marking a fall of over 0.5% within the hour.
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