Fed Keeps Interest Rates Steady, Announces Slower-Than-Expected Pace Of Balance Sheet Runoff (UPDATED)
Portfolio Pulse from Piero Cingari
The Federal Reserve maintained the federal funds rate at 5.25% to 5.5% and announced a slower pace for reducing its balance sheet, with Treasury securities redemption cap reduced from $60 billion to $25 billion, contrary to market expectations of a reduction to $30 billion. The Fed aims for sustainable growth and inflation control, not foreseeing rate cuts until inflation is confidently moving towards 2%. The U.S. dollar index, as tracked by the Invesco DB USD Index Bullish Fund ETF (UUP), slightly declined following the announcement.
May 01, 2024 | 6:22 pm
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The Invesco DB USD Index Bullish Fund ETF (UUP) experienced a slight decline following the Federal Reserve's announcement to maintain interest rates and slow the pace of balance sheet reduction.
The direct mention of the U.S. dollar index's slight decline, as tracked by UUP, following the Fed's announcement suggests a negative short-term impact on UUP. The Fed's cautious approach and the slower-than-expected pace of balance sheet reduction likely contributed to a decrease in confidence in the dollar, affecting UUP.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80