EURUSD survived the US Fed meeting quite successfully; investors got what they wanted.
The major currency pair continues analysing the results of the US Fed meeting. the current quote for the instrument is 1.1545.
So, this week’s key highlight is finally over. The US Fed kept its benchmark interest rate intact at 0-0.24%, just as expected. The Fed Chairman Jerome Powell said that the time to revise the rate hadn’t come yet. The stimulus programme reduced to $105 billion in November and will decrease to $90 billion in December.
In the comments, Powell said that the outbreak of the coronavirus this summer prevented several sectors of the economy, as well as the service industry, from recovering faster. The interruptions in deliveries affected the car industry in the third quarter. No one can say right now when the situation gets back to normal and that’s a risk factor for the nearest future.
The Fed is sure that the very same interruptions might have boosted inflation. In addition to that, the high consumer demand also has a significant negative influence. The CPI is higher than the Fed wants but the regulator is ready to be patient and watch.
As for the labour market, the comments were rather pessimistic. Powell believes that the current unemployment level (4.8%) doesn’t consider the sector weakness due to the lack of manpower in some industries. However, the regulator hopes that employment will reach its highest levels in 2022.
Overall, the results of this meeting were exactly the same as expected. The most important decision was made – the stimulus programme will decrease and may be closed by the summer of 2022. Later, based on the situation, the regulator may switch to revising the rate.