Financial Markets Daily Report 15 June 2023
As widely expected, the Fed held policy interest rates unchanged at the range of 5.00%-5.25%, although officials signalled that further hikes (of around 50bp by the end of the year) were likely to be needed, following upward revisions in their macro outlook for GDP growth, inflation and the labour market.
- As widely expected, the Fed held policy interest rates unchanged at the range of 5.00%-5.25%, although officials signalled that further hikes (of around 50bp by the end of the year) were likely to be needed, following upward revisions in their macro outlook for GDP growth, inflation and the labour market.
- US Treasury yields were flat after the announcement as investors sought to balance the current pause with a more hawkish stance going forward. The USD depreciated slightly, losing 0.3% against the EUR, and the main equity indices were mixed, with the rate-sensitive Nasdaq up 0.4% and the S&P 500 broadly flat.
- Ahead of the Fed meeting, European equities had rallied on the back of a further slowdown in US producer price inflation and upbeat Eurozone industrial production data. Government bond yields across the eurozone had risen by around 4bp as investors awaited the Fed and anticipated a further 25bp hike from the ECB this afternoon.