Yesterday, USD weakened against all major currencies.
The CPI m/m data released yesterday indicated a slight decline in inflation of 0.1%, an improvement from the previous month.
Earlier today, the Federal Reserve held interest rates unchanged at the target range of 0.00% – 0.25%.
The central bank announced that it will continue to increase Treasury purchases at $80 billion a month and mortgage-backed securities at $40 billion a month.
In the projection material, all committee members see it appropriate for interest rates to remain at the current target range throughout 2020 and 2021, while two members see an increase in 2022 and majority of the committee members see a rate of 2.5% in the longer run.
The committee members also see a recovery from the projected growth of -6.5% in 2020 to 5.0% in 2021. Unemployment rate is projected to decline from a forecasted value of 9.3% in 2020 to 6.5% in 2021. Inflation and core inflation figures are projected to increase from the forecasted values of 0.8% and 1.0% in 2020 to 1.6% and 1.5% in 2021 respectively, falling short from the central bank’s 2.0-3.0% targeted range for inflation.
In regard to May’s unexpectedly positive jobs report, Fed Chair Jerome Powell said that the data likely understated the extent of unemployment accounting for the vast number of people reported as employed but were absent from their jobs.
The CPI m/m data released yesterday indicated a slight decline in inflation of 0.1%, an improvement from the previous month.
- CPI m/m (Actual: -0.1%, Forecast: 0.0%, Previous: -0.8%)
- Core CPI m/m (Actual: -0.1%, Forecast: 0.0%, Previous: -0.4%)
Earlier today, the Federal Reserve held interest rates unchanged at the target range of 0.00% – 0.25%.
The central bank announced that it will continue to increase Treasury purchases at $80 billion a month and mortgage-backed securities at $40 billion a month.
In the projection material, all committee members see it appropriate for interest rates to remain at the current target range throughout 2020 and 2021, while two members see an increase in 2022 and majority of the committee members see a rate of 2.5% in the longer run.
The committee members also see a recovery from the projected growth of -6.5% in 2020 to 5.0% in 2021. Unemployment rate is projected to decline from a forecasted value of 9.3% in 2020 to 6.5% in 2021. Inflation and core inflation figures are projected to increase from the forecasted values of 0.8% and 1.0% in 2020 to 1.6% and 1.5% in 2021 respectively, falling short from the central bank’s 2.0-3.0% targeted range for inflation.
In regard to May’s unexpectedly positive jobs report, Fed Chair Jerome Powell said that the data likely understated the extent of unemployment accounting for the vast number of people reported as employed but were absent from their jobs.