FOMC Recap: No More Hiking Bias?

Fed Chairman Jerome Powell is currently delivering his post-meeting press conference, and he is reinforcing the dovish message of the statement. Crucially, he confirmed a Wall Street Journal report from last week by noting that the Fed is evaluating its balance sheet plan and will be finalizing plans at the coming meetings. He also noted that the central bank’s portfolio will be normalized sooner and at a higher level than previously believed.

Essentially, the early interpretation is that the Fed has shifted from a bias toward hiking interest rates to a completely neutral and data-dependent outlook. This represents a major change in outlook from the central bank, and we wouldn’t be surprised to see ongoing weakness in the US dollar and continued strength in stock indices as traders digest the significance of this shift.

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