ZuluTrade Blog

Market Recap- Patiently determining future actions

Market View | Thursday, May 2, 2019 10:18 AM GMT

Yesterday, the FED kept both the wording and the monetary policy unchanged. The US economy is on target, the job market is strong, inflation is weaker but Joreme Powell is communicating his confidence that lower inflation will not persist. One could file yesterday’s FOMC as a no event, or focus on the fact that markets are continuing pricing a rate cut by the end of 2019 or January 2020, while the FED avoids hinting such a move and continues telling that the committee will be patient as it determines future actions. The economic indicators that are especially being watched are the indications of inflation pressure, inflation expectations and labor market.

Worth remembering that the FED’s balance sheet reduction is planned to stop on September 2019 and that the FED is currently debating on the maturities held in its balance sheet. Currently the FED is holding longer term bonds (relatively to the bonds held before 2008) and a decision on the matter will be made by the end of 2019.

Today it is the turn of the Bank of England to have its monetary meeting.



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