Federal Reserve Policy Meeting Highlights - Weekly News Update 27 Jan 2022

The 2-day Fed meeting did not see a rise in the interest rates. The Fed indicates that an interest rate hike may soon be appropriate. Analysts have anticipated that the Fed will implement changes in March of 2022.
Fed Chairman Jerome Powell on Wednesday did not indicate how fast or high the interest rates would climb. However, Powell states that the officials were "of a mind" to raise the bank rates in March without a blowback that could affect the recovery. Powell also believes that the Fed will be able to make swifter actions as the economy is stronger than in 2015.

Key Takeaways

The Benchmark interest rate remains unchanged. The target range stands to be between 0.00% & 0.25%
Quantitative Easing (QE) will not end early, and the balance sheet shrinkage will begin after the rate hike commences.
The Fed has indicated that the economy & employment has strengthened with wage growth increasing.

US stock performance slightly jumped after the Federal Reserve published its policy decision to push forward an interest rate hike. Investors soon reversed their decision as Powell spoke to journalists later that afternoon.
Powell suggested that the Fed would move accordingly to combat the rising prices, indicating that the inflation figures had worsened since the last policy meeting in December.
Many investors had liquidated their government bonds. The 10-year Treasury bonds rose 0.09 points to 1.87%.
US Consumer Price Inflation has almost reached a 40-year high with 7% last month. Supply chain bottlenecks have been expanding, especially in areas that the pandemic has hit.
Unemployment has also fallen to pre-pandemic levels. The labour shortages and increase in job openings have spurred wage growth.

Gold has fallen heavily following the announcement made by the Federal Reserve. The market volatility overnight saw gold prices on Tuesday (26 January 2022) $1847/ounce fall to $1820/ounce.