The Fed vs Inflation

Analyst: Fed didn't raise – interest rate rally did 

Analysts note that the Federal Reserve took into account the rising market interest rates in its latest interest rate announcement - and say that should put investors at ease. Bloomberg reports. 

 

"The Fed didn't hike today, mainly because the bond market hiked for them," writes Callie Cox at Etoro. 

 

Although Jerome Powell was clear that a further increase cannot be ruled out, the market expects that the top has been reached. Wells Fargo strategist Jay Bryson describes it as the line is now "hold" rather than "pause". 

 

- The Fed will probably not raise interest rates any more, says Maria Landeborn, analyst at Danske Bank to TT. 

 

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Interest rates in the US unchanged – for the second time in a row 

As expected, the Federal Reserve left interest rates unchanged in the range of 5.25-5.50 percent, the highest level in 22 years, for the second time in a row. The members of the executive board were unanimous about the decision. The stock market initially rose on the announcement but then fell back.  

 

Bloomberg notes in its linguistic comparison that not much has changed since the last announcement. One difference is that the central bank more clearly emphasizes that the economy will be slowed down by tighter credit conditions, in what is described as a wink to the higher market interest rates.  

 

Jerome Powell will comment on the decision in a press conference starting at 7:30 p.m. The next interest rate announcement will be made in mid-December.  

 

Inflation in the US has fallen back during the year to between 3 and 4 percent. The inflation target in the USA is just like in Sweden at 2 percent.