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July 29, 2020

FOMC Conference- What To Expect in the Market Today

Frank Cabibi

This article will be updated throughout the day tracking any news on the FOMC press conference, tracking news, Powell's statements, and results with investor sentiment. This meeting will impact US indices including US30, as well as major currency pairs like GBP/USD, EUR/USD, USD/CAD, etc.
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12:36 EST

Fed Chairman, Jerome Powell is set to speak today at 2:30 EST. He will most likely have to address the most recent spike in cases that occurred in several states and what his plans are to carry forward. Notably, interest rates are expected to remain unchanged or somewhere in between 0-.25%. Powell may also discuss their current balance sheet of over $6 trillion and possibly an increase in more bond buying, according to Economic Times. High volatility is expected during the discussion. Overall expectation is that the Fed will probably do nothing excessive, and leave most policy unchanged with brief statements of positive forward-looking sentiment.

Federal Interest Rates:

https://tradingeconomics.com/united-states/interest-rate

Treasury Yield Curve:

https://www.gurufocus.com/yield_curve.php

2:06 pm EST

Powell says interest rates will hold as they are, but economic growth is much worse than 'pre-pandemic' levels in the statement.

In the Fed's statement, they said that they would, "support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions."
Now it's time to wait for the conference in 20 minutes...

2:49 pm EST

Powell mentions economic inequalities saying that they are not related to monetary policy, but fiscal policy. He wants to decrease the unemployment rate and keep a tight labor market. They also plan to continue to buy and hold more mortgage back securities and increase credit flow in the economy. Powell is happy with their current strategy and think the economy is in a good place right now for recovery.
Markets are now flat...

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