After a disastrous month, Wall Street was ready for the Federal Reserve’s newest policy decision on interest rates, which resulted in a small increase in stocks on Wednesday.
The actions were taken in response to Treasury’s precise intentions for the volume of upcoming bond sales, which occurred as worries about the US government’s mounting debt increased. It seemed to be in line with traders’ expectations. Next week, the Treasury will auction $112 billion in debt, which is essentially in line with what Wall Street had anticipated.
The Treasury announcement caused a modest decline in the yield on the 10-year Treasury note.
October private sector payroll data was less robust than anticipated, the ADP reported on Wednesday. Employers increased headcount by 113,000 last month, below the 130,000 forecast by Dow Jones economists.
These actions take place while traders wait to see what the Fed will reveal next on policy in Washington. It is widely anticipated that central bankers will keep interest rates unchanged. The CME FedWatch Tool indicates that fed funds futures pricing indicates a greater than 99% likelihood that rates will stay where they are.
The announcement of the decision is scheduled for 2:30 p.m. ET, with a press conference with Chair Jerome Powell to follow at 2:30 p.m. ET.
“They’ve completed their work regarding the fed funds rate. In terms of their balance sheet, they are undoubtedly not finished. Peter Boockvar, CIO of Bleakley Advisory Group, stated on CNBC’s “Fast Money” that this is the ongoing tightening that will persist. It’s likely going to be a really dull statement. On the other hand, [quantitative tightening] is ongoing behind the scenes. In terms of tightening financial conditions, that is replacing rate hikes.
Source (CNBC)
