(LIVE) Fed chair Powell press conference

US Federal Reserve hold interest rates unchanged at 4.5%. Now the Fed chair Powell comments on US economy and monetary policy. Here is the breakdown:

Fed chair, Powell

• it remains to be seen how sentiment will affect spending.
• Sentiment soured, reflecting trade policy concerns.
• Unusual swing in net exports complicates GDP measure.
• Current stance of policy well positioned to respond.
• Near-term inflation expectations have moved up recently.
• Labor market conditions have remained solid.
• Unemployment has stayed in a narrow range and low.
• Estimate total PCE prices rose 2.3%, core 2.6% in May.
• A wide set of indicators consistent with max employment.
• Labor conditions are consistent with maximum employment.
• Tariff effects on inflation could be more persistent.
• Avoiding persistent inflation ultimately depends on keeping long-term inflation expectations well-anchored.
• The effects of tariffs will depend on the level. Increases this year will likely weigh on economic activity and push up inflation.
• Near-term inflation expectations have moved up. Tariffs are a driving factor
• Obligation is to keep a one-time price increase from becoming an ongoing inflation problem.
• Fed policymaker projections are subject to uncertainty, which is unusually elevated.
• Obligation is to keep one-time price increase from becoming ongoing inflation problem.
• In statement said uncertainty about the economy has diminished. That's a line from the Fed's teal book.
• Uncertainty peaked in April and has come down.
• We're adapting in real-time to estimates of how high tariffs will be.
• We likely will get to a place where rate cuts appropriate.
• Economic uncertainty has diminished but still elevated.
• As long as have the kind of labor market we have and inflation coming down, right thing to do is hold rates.
•  We're going to learn more about tariffs over the summer.
• The economy appears to be growing at 1.5%-2% pace.
• We will make a smarter decision if we wait a couple of months.

The Fed remains slightly more hawkish than expected. Market sentiment has worsened due to concerns over trade policy, raising questions about its impact on consumer spending. The labor market remains solid, though short-term inflation expectations have risen, mainly due to new tariffs.

The effects of tariffs are beginning to show and may intensify in the coming months, putting pressure on both economic activity and inflation. The Fed remains cautious and is waiting for more data before making any policy changes. The Fed emphasizes that uncertainty around future decisions remains high, and interest rate forecasts are very conservative.

US100 is losing ground following the Fed decision and Powell’s comments, although the scale of the decline is not significant.