Forex News, Analysis and Comments on Robots

There was quite a bit of volatility in the forex market following the FOMC announcement even though there were no major surprises from the Federal Reserve. The Fed kept interest rates unchanged at 0.25 percent, continued to unwind their emergency measures and reminded the market that they are not ready to raise interest rates. This is the same message that Fed officials have been delivering at every opportunity but given the improvements in the labor market and consumer spending, market expectations got ahead of themselves. Traders temporarily forgot that we are dealing with a very cautious central bank that has come under a lot of fire. Unless there are clear signs of a strong recovery, the Fed will hesitate to telegraph something that could renege on in the future. When it comes to being a central bank, there is nothing wrong with being predictable and we believe that is the sentiment the Fed shares. In our FOMC Instant Insight, we have thoroughly dissected the FOMC Statement and the key takeaway is that the economy is doing better but there could be problems in the housing market that extend beyond the weather related depression of housing starts in February.