Fed Leaves Interest Rates Unchanged, In Line With Analyst Expectations

On January 29, 2025, Fed released FOMC Statement. The Committee decided to maintain the target range for the federal funds rate at 4.25% – 4.50%, in line with analyst estimates.

The Fed noted that labor market conditions remained solid, while inflation was somewhat elevated.

The central bank will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities.

According to the Fed, the risks to achieving its employment and inflation goals were roughly in balance. As usual, the Committee stressed that it was “strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”

U.S. Dollar Index moved higher as traders reacted to Fed Interest Rate Decision. Currently, U.S. Dollar Index is trying to settle above the 108.10 level.

Gold pulled back below the $2750 level as traders focused on stronger dollar and rising Treasury yields.

SP500 declined towards the 6020 level after the release of Fed decision. Traders are worried that Fed may be more hawkish than previously expected.

Traders should note that Fed Chair Powell’s press conference, which starts soon, may have a significant impact on market dynamics.

For a look at all of today’s economic events, check out our economic calendar.