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FED‘s decision to keep the policy rate unchanged in line with expectations on Wednesday shifted the focus in the markets to critical data and macroeconomic indicators for the next interest rate decision. One of the critical data that influenced the FED’s interest rate decision, the US PMI data, has just been released.
FED Keeps Policy Rate Unchanged
The market’s attention was turned to FED‘s interest rate decision announced on Wednesday at 21:00 Turkish time this week. The strongest expectation in the markets was that the FED would keep interest rates unchanged.
Indeed, contrary to market expectations, there was no surprise interest rate hike. FED, despite inflation data coming in above expectations, kept the policy rate unchanged in line with expectations.
FED Chairman Jerome Powell made a press statement live after the announcement of the interest rate decision. Powell gave critical signals regarding the next FED meeting in the press statement.
Emphasizing that inflation is still significantly above the 2% target, FED Chairman Jerome Powell stated that despite inflation remaining above the 2% target, it has slowed down to some extent. Powell expressed that there is a long way to go to reach the 2% inflation target and that there may be a need for further interest rate hikes in the coming months.
US PMI Data Released
Giving the message that they will do their best to reach the 2% inflation target, Powell used the expression “we will continue the interest rate hikes if necessary” and clearly signaled to the markets that interest rate hikes may occur in the coming months. After Powell’s statements, the market’s attention turned to critical data and macroeconomic indicators for the next interest rate decision.
US PMI data, which is one of the indicators that influenced FED‘s interest rate decision, has just been released. While the Manufacturing PMI came in above expectations, the Services PMI fell below expectations.
- Manufacturing Purchasing Managers’ Index (Manufacturing PMI) (September) Released: 48.9 (Expectation: 48.0 Previous: 47.9)
- Services Purchasing Managers’ Index (Services PMI) (September) Released: 50.2 (Expectation: 50.6 Previous: 50.5)
