The FOMC increased the Fed funds rate by 25 bps to 5.00 - 5.25%.
The March FOMC statement had mentioned:
"The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time."
The May FOMC statement has been revised to say "In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time".....
Which essentially points to a "pause".
The Fed fund pricing is pretty much stable with Dec 13, 2023 FFR being priced at 4.39%. USD index is a tad bit lower and 2Y USTs are trading at 3.92% and 10Y at 3.40%. The meltdown in commodities continues. Brent crude prices down further 3.65% to 72.55 USD per barrel. The sharp drop in crude oil prices is a big tailwind for INR. 81.60 continues to be a very important level for the pair. Let's watch tomorrow's opening.
Looks like the Fed acknowledges the deteriorating economic outlook.
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