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Fast Comment US Fed leaves rates on hold; June hike cemented

  1. Fed leaves rates on hold, as expected
  2. Minor tweaks to press statement; June hike cemented
  3. USD a touch lower; short rates unchanged
Fed leaves rates on hold, as expected
As widely expected, the Fed left rates on hold following a two-day policy meeting. The May policy meeting is not followed by a press conference, so the communication is limited to the press release, containing little new information.
Minor tweaks to the press statement; June hike cemented
The press release was changed from inflation running below 2 percent into "moved close to 2 percent". It also said that the Fed expects inflation to run near the symmetric 2 percent objective over the medium term. The Fed kept the wording on household spending as moderating, but upgraded business fixed investments to strong growth.
USD a touch lower; short rates unchanged
Even if the June rate increase was cemented in the press release, short-term interest rate prices were already pricing it in. The dollar fell from session highs and is now trading only slightly lower.

Disclaimer

Lars Henriksson

Strategist

Foreign Exchange

lahe06@handelsbanken.se

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