FOMC interest rate announcement and statement highlights Sept 21, 2016:
- Fed leaves interest rates unchanged in the 0.25% to 0.50% range
- 7-3 was the vote
- Only Esther George had dissented before, she's joined by Rosengren and Mester
- Near-term risks to outlook 'appear roughly balanced'
- Sees job market conditions strengthening 'somewhat further'
- Household spending has been growing strongly but business fixed investment has remained soft
- Repeats it sees "only gradual increases"
- Activity has picked up since the first half
Direct quote from the statement: "The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives."
There is no commitment for a hike here but there is clearly a hike coming so you have to buy the US dollar here. The initial reaction is USD weakness, and that's understandable because there were people saying the Fed would hike, but the longer-term is what matters and Yellen made it clear that a hike is coming and it won't be long.
Here is how USD/JPY reacted in the seconds before/after the announcement:
