Federal Reserve held interest rates steady as expected
Posted on 30. Jun, 2007 by admin in Forex News
The Dollar rose against the Euro on Thursday after the Federal Reserve, which held interest rates steady as expected, reiterated concerns about lingering price pressures in the US economy. The Fed dropped from its policy statement a description of core inflation as “elevated”. But it also said its main concern was that inflation might fail to moderate. The FOMC statement was more hawkish than people were expecting because of the inflation aspect. Markets were pricing in greater chances of a rate cut by the end of the year given the sub-prime and housing problems. Investors had more risk appetite in the market as the rebound in global stock markets, helped by fading concerns about the US sub-prime mortgage market, prompted them to borrow the Japanese currency again to fund carry trades.
