The Federal Reserve decided to hike interest rates for the third time this year, bringing the key rate up to 1.50% despite the uneven inflation backdrop. Figures released by the US Bureau of Labor Statistics highlighted this trend, with annualized CPI trending higher to 2.20% while the comparable core figure fell to 1.70% for the twelve months ended in November. Even though the Fed dot plot pointed towards three additional increases in 2018, there were two dissenting votes from Neil Kashkari and Charlie Evans, who believe that inflation should reach the target before any further adjustments. In her final press conference, Federal Reserve Chair Janet Yellen underscored the potential for the tax plan to contribute to growth momentum, a remark accompanied by upgraded growth forecasts. Despite the hawkish announcement, the dollar nosedived, with the EURUSD pair climbing as much as 100 pips on Wednesday before trimming gains to 1.1820.
Fed Strikes More Hawkish Stance
Daily Analysis - 14/12/2017