The Federal Reserve (Fed) decided to keep interest rates unchanged during its latest policy meeting, which was also the last meeting chaired by Jerome Powell. The EUR/USD currency pair remained negative on the day, trading around 1.1670 and down 0.48% at the time of reporting, as market participants awaited Powell's upcoming press conference for further guidance [1].
In its monetary policy statement, the Fed described the U.S. economy as 'solid' and noted that the unemployment rate 'has been little changed in recent months.' The central bank acknowledged that inflation remains elevated, attributing this in part to high energy prices resulting from the Iran war. The statement also highlighted that 'developments in the Middle East are contributing to a high level of uncertainty about the economic outlook,' and emphasized the Fed's commitment to considering both sides of its mandate [1].
The Federal Open Market Committee (FOMC) vote split was 8 to 4. Fed Governor Stephen Miran voted in favor of a rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan opposed including an easing bias in the statement at this time. The market interpreted the statement as slightly hawkish, particularly due to the three FOMC members voting against an easing bias, which contributed to the EUR/USD pair dropping below 1.1680 [1].
Market participants are now focused on Jerome Powell's press conference scheduled for 18:30 GMT, seeking further clarity on the Fed's policy outlook [1].
CONCLUSION
The Fed's decision to hold rates steady and the hawkish tone of the statement led to a decline in EUR/USD, reflecting market caution amid ongoing geopolitical uncertainty. Investors are now awaiting further insights from Jerome Powell's press conference to gauge the central bank's future policy direction.