According to Fed, the risks to achieving employment and inflation goals are roughly in balance. The central bank noted that the economic outlook remained uncertain and that Fed was focused on the risks to both sides of its dual mandate.
Notably, Fed will continue to reduce its holdings of Treasury securities, agency debt and agency mortgage-backed securities. Such sales put some pressure on the debt market and make Fed’s policy less dovish.
Treasury yields moved away from session lows as traders reacted to Fed Interest Rate Decision. The yield of 2-year Treasuries settled near the 4.23% level, while the yield of 10-year Treasuries moved above 4.35%.
U.S. Dollar Index moved back above the 104.50 level after the release of Fed decision. Traders should note that Powell’s press conference starts soon, and U.S. dollar will be sensitive to Fed Chair’s comments.
