Following the Fed’s announcement, please see below for market views from the Global Fixed Income, Currency & Commodities Team (GFICC):
Consistent with our and the market’s expectations, the Federal Open Market Committee (the FOMC) left the Fed Funds rate unchanged, at 1.0%‐1.25%. The Fed’s only means of communication at this meeting was the typical FOMC Statement.
The FOMC used the July Statement to prepare the market for an official balance sheet announcement at the September meeting. By effectively “marking-to-market” recent economic developments and indicating that a change in the Fed’s reinvestment policy would be coming “relatively soon”, the Committee readied the market for the balance sheet run-off while leaving the prospects for additional rate hikes dependent on inflation data.
We can break the Committee’s statement into four parts:
There were no dissenters at the meeting.