FOMC Leans Dovish on U.S. Monetary Policy

Posted on 06/19/2019 1:58 PM

The Federal Open Market Committee (FOMC) meeting that began Tuesday morning and ended this afternoon with a statement and press conference from Federal Reserve Chairman Jerome Powell made no change in U.S. interest rates. The majority of Fed watchers believed the Fed would not lower interest rates at this meeting. However, the FOMC statement said the committee would lower interest rates in the coming months if U.S. economic growth begins to slow down.

The FOMC members expect the U.S. economic expansion to continue but "uncertainties about this outlook have increased," the statement said. About half of the FOMC members expect the Fed to make at least one interest-rate reduction this year.

Today's Fed statement did eliminate the word "patient" from the FOMC's monetary policy stance. The FOMC statement said inflationary pressures remain low and non-problematic.

The marketplace gave the FOMC statement and Powell's remarks at his press conference a dovish read on U.S. monetary policy. Yields declined for U.S. Treasuries and the U.S. stock indexes moved up modestly. The U.S. dollar index sold off on the news.

The Bank of England and Bank of Japan also hold their regular monetary policy meetings this week.

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