CIBC Research discusses its reaction to today's FOMC policy meeting.
"Stronger growth but weaker inflation equaled a still patient Fed, with no change made to its 2.25%-2.50% bound for interest rates. The interest rate on excess reserves was reduced 5bp to 2.35%, although that's more of an operational move to keep the funds rate within the middle of its target bound. Within the statement, there was an acknowledgment that core inflation has "declined" and "running below 2%", although there didn't seem to be too much concern around this at this stage. That will be something to look for later in Chair Powell's press conference. With regards to growth, they only chose to state that business investment and household spending slowed, rather than lean towards the positives from the GDP report. The Fed still suggests that it will remain "patient" as it determines "future adjustments", with again no real leaning towards which direction it thinks any future adjustments will be," CIBC notes.
"Bond yields and the US dollar are slightly lower, presumably due to the mention of weak inflation, but may only hold those moves if Chair Powell expresses significant concern regarding that development in the press conference, CIBC adds.