Fed meeting HIGHLIGHTS: 'Long way to go' on inflation, says Powell after FOMC holds rates for 2nd time

“The idea that it would be difficult to raise again after stopping for a meeting or two is just not right,” Powell said. “The Committee will always do what it thinks is appropriate at the time.”

Stocks remained positive, even as earlier gains were moderated after Fed Chair Powell said that the central bank hasn’t yet reached a decision on how it will proceed at its December meeting. The S&P 500 was last up 0.3%, the Nasdaq Composite was up 0.5%, and the Dow was up 0.1%.

“This has been a resilient economy. It has been surprising in its resilience,” Powell said. Previewing the Fed’s minutes from its monetary policy meeting that concluded today, Powell said the Fed did not factor in a recession in the near future. The Fed releases its minutes three weeks after each policy meeting.

Powell notes that “immigration has rebounded to prepandemic levels,” NYT quoted the Fed chair. That’s a big part of the reason that the labor force has grown faster than many forecasters expected, which has in turn helped allow job growth to continue without driving inflation higher, it added.

Although recent inflation readings have dropped below 4%, the Federal Reserve is not declaring a win over inflation, said Jerome Powell in his speech today. “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. The process of getting inflation sustainably down to 2% has a long way to go,” CNBC quoted him as saying.

“There’s very little shock factor in today’s rate decision,” CNN quoted Seema Shah, chief global strategist at Principal Asset Management.

Federal Reserve Jerome Powell begins his address after the FOMC decided to keep interest rates unchanged for the second consecutive time.

The US Fed has aggressively raised interest rates 11 times since March 2022 in an attempt to fight inflation. The US economy has not only avoided a recession so far but the pace of economic growth of 4.9% per annum on the back of consumer spending. The inflation remains above the Fed target of 2%, even though it has receded from its four-decade peak last summer.

The Federal Reserve has upgraded its stance on the economy as the US central bank decided to keep interest rates unchanged for the second consecutive time. In its statement, the Fed said, “economic activity expanded at a strong pace in the third quarter.” In its September meet statement, policymakers said the economy had expanded at a “solid pace.” The central bank decision comes close on the heels of a report showing that the US GDP expanded at a 4.9% annualised rate, exceeding expectations.

US stocks remained positive, with the S&P 500 up 0.4%, the Nasdaq Composite up 0.7%, and the Dow up 0.3%. Treasury yields slipped, with the 10-year yield sliding to 4.795%, off about 8 basis points.

BIG BREAKING ON Federal Reserve meeting LIVE Updates: FOMC keeps interest rate unchanged for 2nd time, investors await Powell speech

Jeffrey Lacker, former president of the Richmond Fed suggested investors shouldn’t bet on the Federal Reserve ending its policy tightening campaign.

“There’s nothing in it for him [Chair Jerome Powell] to take interest rate hikes off the table and signal a definitive pause for a long time,” he said on CNBC’s “Squawk on the Street.” “He’s going to keep them on the table. They’re still far from getting done bringing inflation under control.”

US FOMC Meeting LIVE Updates: Federal Reserve monetary policy decision shortly

World shares logged meager gains as investors remained cautious ahead of a decision on interest rates Wednesday by the U.S. Federal Reserve. Oil prices were higher as Israeli airstrikes leveled apartment buildings in Gaza and ground troops battled Hamas militants inside the besieged territory. U.S. benchmark crude oil advanced 86 cents early Wednesday to $81.88 a barrel. It lost 29 cents on Tuesday to $81.02. Brent crude, the international standard, picked up 85 cents to $85.87 a barrel. Read full story here 

US markets rose on Wednesday after closing out a third straight month of losses. The Dow was 132 points, or 0.4% higher in midday trading. The S&P 500 climbed 0.5% and the Nasdaq Composite was up by 0.6%, as reported by CNN. While Information technology stocks outperformed with the sector rising up more than 1% after semiconductor company AMD beat third-quarter earnings expectations. Shares of AMD were 7.6% higher. The company also lifted other semiconductors and tech companies — Nvidia was trading up 2.5% and shares of Microsoft were up nearly 2%.

The yield on the 10-year US Treasury note dipped below 4.8% Wednesday morning, CNN reported. This comes after the Treasury Department announced its quarterly refunding plans, which involve auctioning a slightly smaller amount of debt than investors expected, it added.

Stocks rose Wednesday as Wall Street braced for the Federal Reserve’s latest policy decision on interest rates after closing out a terrible month. The Dow Jones Industrial Average advanced 200 points, or 0.6%. The S&P 500 climbed 0.79%, and the Nasdaq Composite gained 0.96%.

The number of job openings in the US climbed again in September, rising to the highest in four months, according to data released Wednesday by the Bureau of Labor Statistics. There were an estimated 9.553 million available jobs in September, according to the BLS’ latest monthly Job Openings and Labor Turnover Survey (JOLTS) report. It’s the second month in a row that the number of job openings increased. The September total is up from August’s downwardly revised estimate of 9.497 million openings.

David Doyle, head of economics at Macquarie Group, said Powell’s comments “may be more market moving” than the FOMC statement, adding that markets will be watching for the chairman’s views on the movement in Treasury yields, a report on CNBC.com said. He also noted that the Fed by now will have seen the quarterly senior loan officer survey that gauges how tight lending conditions are at banks, it added.

Gold started November on a softer note, with investors on the watch for the US Federal Reserve’s policy decision due later in the day after concerns over the Middle East conflict boosted the safe-haven asset’s prices above $2,000 an ounce last month.

Federal Reserve policymakers agreed last month that policy should remain restrictive for some time while noting that the risks of overtightening now had to be balanced against keeping inflation on a downward path toward 2%.

A high rate of interest is negative for crude as it slows economic activity and strengthens the US dollar.

Well-known investor Adrian Mowat predicts that the central bank will stand pat on rates, given the strong economic indicators. The rise in bond yields has been a key factor influencing this perspective. Yields have climbed from under 4% in July to almost 5% now, a trend that has not gone unnoticed by the Fed and has prompted a more careful strategy.

According to a CNBC Fed Survey, there’s an expectation that the Federal Reserve will maintain its current rates at 5.25-5.50% and stick to its ‘higher for longer’ mantra. They expect no rate cuts at least until the third quarter of 2024. The fed funds rate, a key benchmark for short-term lending costs, is now projected to end 2024 at 4.6%, up from an earlier forecast of 3.8%. What does a higher for longer stance mean for global markets and how can it influence the financial market from equities to currency?

Oil prices rose more than 1% on Wednesday ahead of the keenly watched meeting of the U.S. central bank for clues on interest rate policy, while the conflict in the Middle East remains in focus. Brent January crude futures were up about 1.1%, or 90 cents, to $85.92 a barrel by 1042 GMT. U.S. West Texas Intermediate crude futures also gained 1.1%, or 90 cents, to $81.92 a barrel. “Crude prices are steadying ahead of a key issuance update by the Treasury and FOMC rate decision,” said OANDA analyst Edward Moya, referring to the Federal Open Market Committee that sets the direction of U.S. monetary policy.

World shares logged meager gains as investors remained cautious ahead of a decision on interest rates Wednesday by the U.S. Federal Reserve. Oil prices were higher as Israeli airstrikes leveled apartment buildings in Gaza and ground troops battled Hamas militants inside the besieged territory. In recent days, Israeli troops have advanced toward the outskirts of Gaza City from the north and east. Worries that fighting could escalate beyond the latest Israel-Hamas war, potentially disrupting supplies, have roiled oil markets in recent weeks. US benchmark crude oil advanced 86 cents early Wednesday to $81.88 a barrel. It lost 29 cents on Tuesday to $81.02. Brent crude, the international standard, picked up 85 cents to $85.87 a barrel. Germany’s DAX edged up less than 4 points to 14,813.13 and the CAC 40 in Paris gained less than 0.1% to 6,891.38. Britain’s FTSE 100 was up less than 1 point at 7,322.05. The futures for the S&P 500 and the Dow industrials were 0.4% lower ahead of the decision later Wednesday by the Federal Reserve on interest rates. The overwhelming expectation is that the Fed will keep its overnight interest rate steady. The bigger question is how long it will keep that main rate high.

US FOMC Meeting LIVE Updates: The Jerome Powell-led Federal Open Market Committee (FOMC) is set to conclude its two-day meeting on Wednesday, November 1, and reveal the Committee’s decision regarding benchmark lending rates in the United States. In its previous policy meeting on September 20, the US central bank left the benchmark interest rates unchanged, with a range of 5.25% to 5.50%.