Fed left interest rate unchanged at 1.50-1.75% overnight as widely expected, by unanimous vote. Chair Jerome Powell said in the post meeting press conference that current monetary stance is “appropriate”. He added that global growth stabilizing and trade uncertainties receded.
However, “uncertainties about the outlook remain, including those posed by the new coronavirus.” “China’s economy is very important in the global economy now, and when China’s economy slows down we do feel that – not as much though as countries that are near China, or that trade more actively with China, like some of the Western European countries”. He added that Fed is “very carefully monitoring the situation” regarding the coronavirus, but it’s “too early” to assess the impact.
Here are some reviews:
- Uneventful Fed a Sign of Things to Come?
- The Federal Reserve Leaves Rates Unchanged as it Continues to Monitor the Outlook
- Northern Exposure: Growth and Inflation to Justify Further FOMC Easing from Mid-Year
10-year yield extended recent fall and closed down -0.047 to 1.594. The decline was mainly due to coronavirus related safe haven flow rather than FOMC statement. TNX is expected to drop further to retest 1.429 low. At this point, we’re not expecting a firm break there. Instead, range trading should continue between 1.429 and 1.971.
