Federal Reserve Maintains Unchanged Interest Rates

On January 31, the Federal Reserve issued the FOMC Statement, maintaining the federal funds rate at its current level, aligning with analyst predictions. The Fed acknowledged a decrease in inflation over the past year, but noted that it remained at a heightened level.

The Fed stated, "The Committee does not anticipate reducing the target range until it has acquired greater confidence that inflation is steadily progressing towards 2 percent."

During the press conference, Powell emphasized the importance of gaining stronger confidence in inflation's progress towards the 2% target.

The Fed aims to avoid slower economic growth or a weaker job market and maintains a focus on inflation data. Powell highlighted the need for ongoing positive inflation data, expressing concern that inflation could stabilize above the Fed's 2% target.

Fed Chair Powell also noted that it was premature to determine if the U.S. economy had achieved a "soft landing" and stressed that there was still significant work to be done.

Overall, Powell's outlook was not overly aggressive, leaving uncertainty about whether the market would be inclined to anticipate substantial rate cuts after his press conference.

The U.S. Dollar Index fluctuated in response to Powell's remarks, while traders bet on the Fed's future rate cuts, leading to lower Treasury yields.

Gold also demonstrated volatility as traders monitored the movement of the U.S. dollar.

The S&P 500 trended back towards the 4860 level, with pressure on major indices persisting due to the ongoing sell-off in leading tech stocks.