On Wednesday, June 12th, the Federal Reserve kept its interest rate policy unchanged as scheduled, maintaining the federal funds rate range at a 20-year high of 5.25% to 5.50% for the seventh consecutive meeting since July last year.
The Fed expects inflation to &#34;further moderately improve.&#34; The &#34;dot plot&#34; reflecting officials' rate views reduced the number of rate cuts for the year from three to one, which was somewhat hawkish, but not completely unexpected by some market participants.
After the interest rate decision was announced, the gains in US stocks and gold narrowed, while the declines in the US dollar and US bond yields also narrowed:
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US stocks saw a slight narrowing of gains, with the S&amp;P rising by less than 1% and the Dow briefly turning negative.
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The 2-year US Treasury yield rose by 4 basis points in the short term, narrowing its intraday decline to 11 basis points, trading at 4.72%. The 10-year Treasury bond yield narrowed its decline to 11 basis points, rising back to 4.29%.
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The US dollar index narrowed its decline to 0.7% to 104.50, while spot gold narrowed its gains to 0.5%, falling below the $2330 mark or dropping by less than $10 in the short term.
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Minutes before Federal Reserve Chairman Powell's press conference, major asset classes largely erased the short-term changes brought by the decision statement. US stock indices erased short-term declines, US bond yields continued to decline by 12 basis points intraday, the US dollar index remained down by 0.7%, and spot gold approached $2330 again. Some analysts believe that the stock market maintained its rise after the Fed's statement reevaluated the progress of cooling inflation as &#34;moderate.&#34;
During Powell's press conference, the Dow turned negative again, while gains in other US stock indices narrowed. The decline in US bond yields quickly narrowed, with the 2-year US Treasury yield overall down by less than 9 basis points to return to 4.75% intraday, and the 10-year Treasury bond yield down by 10 basis points to return to 4.30%. The US dollar index fell by 0.6% to trade at 104.60, while spot gold narrowed its gains to 0.3% and approached $2320.
Powell stated that inflation progress in the first quarter has stalled, indicating a need for a longer wait on the rate cut issue
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Before the Fed's decision, due to the unexpectedly cool US May CPI consumer inflation data announced earlier on the same day, the market brought forward expectations of the Fed's first rate cut to September, significantly boosting risk appetite, and causing a sharp drop in the US dollar and US bond yields:
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The S&amp;P 500 index, dominated by the tech stocks of the Nasdaq, hit a new high at the opening, with the S&amp;P rising more than 1% and breaking through 5400 points, while the Nasdaq rose more than 300 points or about 2%. The Dow rose more than 370 points or about 1% at the opening, briefly breaking through 39,000 points, but the gains narrowed significantly before noon.
5 minutes before the decision was announced, the S&amp;P maintained a 1% gain, the Nasdaq rose 1.8%, the Russell 2000 rose 2.6%, all hovering near the day's highs, while the Dow's gains narrowed to 0.1%.
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US bond yields plunged to a ten-week low in double digits. The two-year yield, more sensitive to monetary policy, fell the most by 16 basis points to 4.67%, the lowest since early April, while the 10-year benchmark yield dropped more than 14 basis points to 4.25%, the lowest since April 1.
5 minutes before the decision was announced, the two-year US bond yield fell by 14 basis points and breached 4.70%, while the 10-year benchmark yield also dropped by 14 basis points to 4.26%.
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The DXY, a basket of six major currencies against the US dollar, fell the most by 0.9% to 104.26, breaking through the 105 level, erasing most of the gains since last Friday, ending a three-day rally and moving away from the four-week high. The euro and pound both rose more than 100 points against the US dollar, while the yen rose by 1%.
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Spot gold rose nearly $25 or more than 1%, briefly breaking through $2340, recovering nearly half of the decline since last Friday, while spot silver rose more than 3% and broke through the $30 mark, moving away from a four-week low
Five minutes before the announcement, the US Dollar Index continued to fall by 0.8% to 104.37, while spot gold rose by 0.8% to $2334, holding above the $2330 integer mark.
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The S&P 500 rose by less than 1% at one point, while the Dow Jones briefly turned negative. The intraday declines in the 2-year and 10-year U.S. Treasury yields narrowed to 11 basis points, trading at 4.72% and 4.29% respectively. The U.S. dollar index narrowed its decline to 0.7% to 104.50, while spot gold narrowed its gains to 0.5%, falling below the $2330 integer mark or a short-term decline of less than $10. During Powell's press conference, the Dow Jones turned negative again, U.S. stock index gains narrowed again, and U.S. bond yields quickly narrowed their declines

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After the Fed's decision, the gains in US stocks and gold narrowed, while the short-term rebound in US bond yields was 4 basis points