Dec 12, 2019

The Fed's statement is a bit of a head-scratcher

Screenshot of the Fed's dot plot

Wednesday's Federal Open Market Committee meeting was largely a non-event, with the Fed holding U.S. interest rates steady as expected by nearly 100% of the market.

Between the lines: However, the Fed's statement and predictions for future policy left many confused.

  • Powell suggested a high barrier for rate increases in 2020, and a willingness to cut, but the Fed's dot plot shows a higher likelihood of rate hikes than rate cuts next year.

Of note: Powell also expressed the central bank's willingness to expand its Treasury purchase program to include longer-dated bonds if the repo market sees more stress, but held off on announcing a standing facility or guaranteeing any further initiatives to pump more liquidity into the market.

Go deeper: The market will need the Fed again in 2020

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The Fed plans to keep pumping cash

Illustration: Aïda Amer/Axios

The New York Fed added $83.1 billion in temporary liquidity to financial markets Thursday, and the U.S. central bank looks primed to keep pumping cash for at least the next few months.

Why it matters: The stock market's 30% gain in 2019 was in no small part backed by the Fed's decision to cut U.S. interest rates three times and inject more than $1 trillion of temporary financing into the repo market. It also added more than $400 billion to its balance sheet in the fourth quarter.

Go deeperArrowJan 10, 2020

Powell and the risk-off bull market

Jerome Powell. Photo: Alex Wong/Getty Images

The Fed’s 180-degree turn was the story of 2019, asset managers and market analysts say.

What happened: Chairman Jerome Powell and the U.S. central bank went from raising interest rates for a fourth time at the close of 2018 and giving market watchers the explicit expectation this would continue in 2019, to doing the opposite. The Fed cut rates thrice and even began re-padding its balance sheet in the last quarter of the year, bringing it back above $4 trillion.

Go deeperArrowJan 2, 2020

S&P 500 doubled its average return under past presidents during Trump's first 3 years

Photo: Nicholas Kamm/AFP via Getty Images

The S&P 500 has had a return of over 50% during President Trump's first three years in office, more than doubling the average return of 23% at the same point in a presidential term since 1928, CNBC reports.

The big picture: The market, which hit record highs across the three major indices, got a sustained lift in 2019 after Federal Reserve Chair Jerome Powell lowered interest rates three times, the first such moves since the end of the financial crisis.

Go deeperArrowDec 26, 2019