zerohedge67d ago
Despite Two Dovish Dissents, Fed Holds Rates As Expected; Upgrades Growth, Lowers Labor Risks Since the last FOMC meeting on Dec 10th (which resulted in a dovish-er than expected 25bps rate cut and statement), US macro data has surprised significantly to the upside...Source: Bloomberg...prompting a plunge in the market's Fed rate-cut expectations (now below 2x 25bps cuts for the year)...Source: BloombergThe market is now more only modestly more dovish than The Fed's dots for 2026 (but the market is also not pricing in any more moves from The Fed after that)...Source: BloombergAll of which has sent the dollar tumbling and gold exploding higher (while stocks rallied and bonds sold off)...Source: BloombergHeading into today's FOMC statement (and presser), a dramatically wide consensus expects a "boring" and "uneventful" dovish hold with an upgrade to growth, and less downside risk to employment....and that's EXACTLY what we got.No change in rates...Federal Open Market Committee votes 10-2 to leave its benchmark interest rate in a target range of 3.5%-3.75%Fed Governors Christopher Waller and Stephen Miran voted against the decision in favor of lowering rates by a quarter-pointWhich prompted a jump in the odds of Waller getting The Fed Chair job...Source: PolymarketUpgrade for growth:Fed upgrades view of economy to say available indicators suggest economic activity “has been expanding at a solid pace,”Inflation-watch:Fed repeats inflation “remains somewhat elevated”Labor market optimism:Fed removes language from statement that had noted “downside risks to employment rose in recent months”Fed tweaks description of the labor market, noting “job gains have remained low” and the jobless rate has “shown some signs of stabilization”In terms of market reaction, it’s a nothing burger so far as most expect.Read the full redline of the FOMC Statement below: Tyler DurdenWed, 01/28/2026 - 14:00
