The Federal Reserve kept interest rates steady at 4.25%-4.50% as expected, but removed language indicating inflation progress, signaling a more cautious stance on future rate cuts. The US Dollar strengthened initially, putting pressure on the AUD/USD pair, which fell to 0.6220. Despite some initial hawkish interpretation, Fed Chair Jerome Powell's press conference conveyed a more dovish message, emphasizing the continued restrictive policy and hinting at a gradual transition towards a less restrictive stance. The AUD/USD remains under selling pressure, with key support at 0.6200.
Federal Reserve leaves rates unchanged at 4.25%-4.50% as expected. Fed statement removes prior language on inflation progress, signaling a cautious approach. Jerome Powell was seen somewhat dovish in his presser. The AUD/USD pair extended its decline on Wednesday, falling to 0.6220 following the Federal Reserve ’s policy decision. As widely anticipated, the Fed left interest rates unchanged at 4.25%-4.50%, but the statement carried a hawkish tone.
Fed Chair Jerome Powell reiterated that the US economy is maintaining solid growth, while the labor market remains strong, with unemployment still at low levels. However, Powell later played down the significance of this change, calling it a language cleanup rather than a shift in policy stance. Initially, markets interpreted the removal of the inflation progress comment as hawkish, but Powell’s clarification made it appear more dovish.
FEDERAL RESERVE INTEREST RATES INFLATION US DOLLAR AUD/USD
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