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 (FOMC) maintained the Fed Funds rate range of 1.75%‐2.00%.
The August statement matched the market’s expectation for minimal changes causing little market reaction. The Committee continues to emphasize the solid growth and inflation backdrop and view the balance of risks as roughly balanced. The statement also maintained language describing current policy as accommodative and describing gradual rate hikes as appropriate.
The Fed statement did not reference the balance sheet but the process will continue in the background. We expect more conversation about the future of the balance sheet run-off to occur in the August minutes.
We can break the statement into three parts:
There were no dissenters