Bonds & Rates
Home›Bonds & Rates›Central Banks›FOMC leaves rates unchanged as inflation remains eleva…
FOMC leaves rates unchanged as inflation remains elevated
The Fed said it remains committed to bringing inflation back to a 2.0% annual target, while noting uncertainty about how far recent price shocks are feeding into the broader consumer basket.
Action Forex reports that at its July meeting, the FOMC voted 9-3 to keep the fed funds rate unchanged, while describing productivity growth as strong and overall economic momentum as solid.
The outlet notes that the statement characterized the unemployment rate as having changed little, but said inflation remains elevated in part due to supply shocks and price increases in certain sectors, including volatility tied to the Middle East conflict and a surge in tech components.
Action Forex adds that the FOMC Chair, Warsh, pointed to debate over the drivers and implications of long term yields, with nominal and real yields having risen materially in recent months.
The outlet says the market response to the idea that the FOMC could allow the market to adjust financial conditions included a material steepening of the yield curve, and that the Fed expects policy to remain in focus at upcoming meetings, particularly September and October.