FOMC, Dow Jones Index, US Economy – Talking Points
- FOMC announcement keeps rates unchanged at 0-0.25%, as expected
- The Dow Jones Index remains higher following the policy statement
- Fed Chair Powell expected to speak shortly – Check back for updates
As expected, the Federal Reserve’s Federal Open Market Committee kept rates unchanged Wednesday afternoon at 0-0.25%. The Dow Jones Index was unaffected as the announcement crossed the wires, with the index continuing in positive territory following some brief whiplash, currently higher by 0.29%. With no major policy shifts announced this afternoon, the accommodative stance is still the status quo, as expected.
Dow Jones Index (1-Min Chart)
Source: IG Charts
With the Fed already in an aggressive stance following its actions surrounding the COVID-19 pandemic and today’s reinforcement of that stance, upward pressure may continue in the short-term for US equity markets. Indeed, a major boost to markets remains the Fed’s quantitative easing actions through its balance sheet, now hovering just under 7 trillion in total. Regarding the ongoing COVID-19 pandemic, the Fed stated “The path of the economy will depend significantly on the course of the virus.”
S&P 500 Versus Fed Balance Sheet
Chart created in TradingView by Thomas Westwater
Adding to the Fed’s “whatever it takes” stance to support the economy was an announcement extending the lending facilities put in place earlier this year, designed to support the flow of credit throughout the economy. Fed Chair Powell will be speaking momentarily. Certainly, traders will tune into any language or changes in tone from Mr. Powell to judge the ongoing commitment to support the economy.
** Breaking News – Check back for updates **