Fed holds Rates steady.

As expected the Fed left rates unchanged with a 9-1 vote. Fisher was the lone voting member looking for a hike in rates.

The opening line in the inflation paragraph read,

The Committee expects inflation to moderate later this year and next year.

Wishful thinking maybe but the statement was not hawkish enough for the market's to expect a rate rise in the immediate future. Fed Fund futures which before the announcement were looking for 75bp by year end moved that expectation to 50bp. It would not surprise me to see this drift lower in the weeks ahead.

The future policy outlook stated that the committee would continue to monitor the situation an act as needed promote its duel goals of growth and price stability. The FOMC noted both downside risks to growth and upside risks to inflation. This is nothing new as the Fed Govoners have been talking like this for a while. I think this implies a very slight bias toward tightening but not enough to expect anything near term. I think that the duel risks to the economy (slow growth and high inflation) will keep the Fed on hold into next year.

Good Luck and Good Currency Trading