BlackRock Think Tank: The Federal Reserve's decision to maintain interest rates is within its expectations

Jean Boivin, head of BlackRock's think tank, stated that the Federal Open Market Committee (FOMC) meeting appeared to lack much novelty on the surface, and the decision to maintain interest rates was expected, with only a few words changed in the policy statement. However, the firm believes that the meeting largely confirms the conclusions drawn after Chair Powell's June meeting. At that time, they did not simply interpret Powell's remarks as a hawkish stance, as he was more focused on retaining policy options rather than a clear policy path. The meeting further reinforced this view. By keeping interest rates unchanged, it provided almost no forward guidance, instead emphasizing that future decisions will depend on subsequent data and evolving financial conditions. While the statement itself was sparse, the market reaction conveyed more information. Powell has clearly indicated that he wants to "observe" the market, and the significant steepening of the long end of the yield curve suggests that investors remain concerned about persistent inflation and expect further volatility in interest rates. The firm stated that it continues to prefer the front and middle of the Treasury market for yield rather than long-term Treasuries, as it believes there is still room for the term premium to reprice upward

According to the Zhitong Finance APP, Jean Boivin, head of BlackRock's think tank, stated that the Federal Open Market Committee (FOMC) meeting appeared to lack much novelty, and the decision to maintain interest rates was expected, with only a few words changed in the policy statement.

However, the firm believes that the meeting largely confirms the conclusions drawn after Chairman Waller's June meeting. At that time, they did not simply interpret Waller's remarks as a hawkish stance, as he was more focused on retaining policy options rather than a clear policy path. The meeting further reinforced this view. Maintaining interest rates unchanged provided almost no forward guidance, instead emphasizing that future decisions will depend on subsequent data and evolving financial conditions.

If the statement itself contained little, the market reaction conveyed more information. Waller has clearly stated that he wants to "observe" the market, and the significant steepening of the long end of the yield curve indicates that investors remain concerned about persistent inflation and expect further volatility in interest rates.

The firm stated that it continues to prefer the front and middle of the Treasury market for yield rather than long-term Treasuries, as it believes there is still room for the term premium to reprice upward