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At 2 p.m. in the eastern United States on Wednesday, September 22nd, the Federal Reserve FOMC released a high-profile monetary policy decision, holding back on ultra-low interest rates near zero, as expected, saying that curtailment of bond purchases was "imminent", which was seen as a sign that taper might start in November. At the same time, the bitmap shows that FOMC members have 50% of their views on whether to raise interest rates in 2022, that is, they expect to raise interest rates ahead of schedule.
After the announcement of the resolution, US stocks expanded, the three major indices rose more than 1 per cent on the day, gold climbed rapidly, and the decline in 10-year US Treasury yields deepened:
The three major indexes of u.s. stocks rose in the short term, with the Dow rising from 350 points to about 520 points, or 1.5%, the s & p 500 and Nasdaq both up 1.4%, banks outperformed, and the Philadelphia stock exchange KBW bank index rose 2.8%.
Spot gold quickly expanded by about $11 to more than $1787, or 0.7 per cent. At one point, the dollar index rose to a new high of 93.34, then fell below the 93 mark at one point, and the overall decline widened to 0.2% during the day.
The yield on 10-year US Treasuries fell more than 1.3 basis points in the short term to a new low of 1.2938 per cent, falling more than 2.7 basis points on the day as a whole and falling below the 1.30 per cent mark at one point. The rise in two-year US Treasury yields widened to 1 basis point to a new high of 0.2261 per cent.
Half an hour after the announcement, Federal Reserve Chairman Powell was optimistic about US economic growth and continued improvement in the labor market, stressing that the factors contributing to high inflation are temporary, and that if economic progress continues, it may soon guarantee that the Federal Reserve will begin to reduce QE, and gradually reduce QE by around mid-2022.
After Powell's rather hawkish remarks, gold gave up all its gains, US bond yields stopped falling and turned higher, and US stock gains narrowed sharply:
Spot gold gave up almost all the gains of nearly $14 since the Fed's decision was announced, falling throughout the day to a new low of $1770.35 an ounce.
Gains in u.s. stocks also narrowed sharply, with the Dow rising less than 300 points or 0.9%, the s & p 500 and Nasdaq both narrowing to 0.7%, and the Nasdaq up less than 100 points on the day.
The dollar index narrowed its intraday decline to above 93.10. The yield on the 10-year Treasury note stopped falling and turned higher on the day, rising 0.2 basis points to 1.326%.
Wall Street generally believes that in view of people's concerns about the global economic recovery, the Fed will officially begin to scale back its bond-buying (taper), in November or December this year. If the signal or concept of "imminent taper" given at the September meeting is not enough to disturb the market, the biggest highlight of this meeting is a "bitmap" that reflects officials' views on the trend of interest rates, which may change the market's expectations of raising interest rates. Federal Reserve Chairman Colin Powell has said that slowing the pace of asset purchases should not be seen as a signal of when interest rates may be raised.
Before the announcement of the FOMC resolution:
Five minutes before the resolution was announced, the Dow maintained a gain of more than 340 points, or 1%, the S & P rose 0.9%, and the Nasdaq rose 0.8% or more than 110 points. The dollar index rose on the day, trading at 93.23. The yield on 10-year Treasuries fell 1.5 basis points, hovering around a session low of 1.3057%. Spot gold narrowed to less than 0.1%, to less than $1776.
U. S. stocks opened higher, led by financial and energy sectors, with the Dow and the S & P 500 falling four times in a row, rebounding from three-month and two-month lows, respectively. The Dow rose nearly 500 points or 1.5% on the day, back above 34000 points, the S & P market rose 1.3% to 4400 points, and the Nasdaq rose for two days, up more than 179 points or 1.2%, once more than 14900 points. Some analysts said that U. S. stocks rebounded the biggest since July, while European stocks were also boosted by basic resources and energy stocks.
The yield on 10-year US Treasuries fell as low as 1.4 basis points before midday, falling below 1.31 per cent, up from 1.324 per cent yesterday. The yield on 30-year US Treasuries fell 1.9 basis points at its deepest level, falling below 1.84 per cent at one point. The yield curve flattened, with the spread on 5-year 30-year Treasuries falling more than 1.5bp to a new low of 100.796 basis points.
Spot gold rose 0.3% to $1780 an ounce before midday in the U.S., rising for three days and recovering most of its losses since Sept. 16. Spot silver rose more than 2% and pushed up the $23 mark, basically recovering this week's decline. Some analysts say that if the Fed slows the pace of taper out of concern about the weakening of the US economic recovery, it will help gold prices get back close to the $1800 line.
The dollar index fell less than 0.1%, still standing above 93.10, not far from Monday's one-month high of 93.455. Risk and commodity currencies generally rebounded, with the offshore renminbi rising about 250 points against the dollar at one point, and the ebb of safe-haven demand continued to weaken the yen. The digital currency rebounded slightly, with Bitcoin back above $43000 after falling below $40, 000 for the first time since early August, hitting an one-and-a-half-month low.
