FOMC Meeting Statement: What Investors Must Know Now
By Diane Alter, Contributing Writer, Money Morning•
As widely expected, the U.S. Federal Reserve announced in today's FOMC meeting statement that interest rates will remain unchanged for now.
But that's not the only thing investors need to know now. Here's a full rundown of everything investors need to know about the FOMC meeting statement.
What the FOMC Meeting Statement Means for You
The September FOMC meeting was arguably the most important FOMC meeting of 2016. Economists and investors will be dissecting the Fed's statement for weeks. In the meantime, these are the most important details.
The Fed left interest rates unchanged at 0.25% to 0.50%, but officials said the case for a rate hike has strengthened. Still, policymakers are waiting for more evidence of a strong economy before raising rates.
Fed officials also said the labor market continues to improve even though the unemployment rate has remained unchanged in recent months.
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Economic activity has also picked up since the first half of the year.
Household spending has been growing strongly, but business investment remains soft.
Inflation is still below the Fed's 2% target, partly reflecting earlier declines in energy prices and prices of non-energy imports. Plus, survey-based measures of longer-term inflation expectations were little changed in recent months. The committee continues to closely monitor inflation indicators, global economic conditions, and financial developments.
The central bank says it will remain accommodative on economic policy.
There were seven Fed members who voted to leave interest rates unchanged. Only three members voted to raise interest rates this meeting. Those voting against preferred at this meeting to raise the target range for the federal funds rate to 0.50% to 0.75%.
Commodities were rallying ahead of the meeting. Gold ended Wednesday's session up $13.50, or 1%, to $1,331.50 an ounce. Silver closed higher by $0.49, or 2.5%, at $19.76 an ounce. Oil broke $45 intraday on a bullish supply report. All spiked following the FOMC statement, as did utilities and financials.
Heading into the FOMC meeting, market odds of a December rate hike stood at 45%. After the statement, odds rose to 51.9%.
Despite the lack of action from the Fed today, the Federal Reserve could still be disastrous for your money this year. Money Morning Chief Investment Strategist Keith Fitz-Gerald shows you how to protect yourself from the Fed here.