Advertisement

Dollar down as Federal Reserve begins policy meeting

By Andrew V. Pestano
Fed Chairwoman Janet Yellen and voting members of the Federal Reserve met Tuesday to begin this month's two-day policy meeting. File Photo by Kevin Dietsch/UPI
Fed Chairwoman Janet Yellen and voting members of the Federal Reserve met Tuesday to begin this month's two-day policy meeting. File Photo by Kevin Dietsch/UPI | License Photo

July 25 (UPI) -- The U.S. Federal Reserve is expected to leave key interest rates unchanged at its two-day policy meting this month, which started Tuesday.

Investors and market analysts will look for clues on the central bank's plan to trim its holdings of bonds at the end of the meeting Wednesday.

Advertisement

They will also look for the Fed's policy plans for the second half of 2017, particularly on how the the Federal Open Market Committee will reduce its $4.5 trillion balance sheet.

"We believe that the announcement that comes out will be rather benign; it will be what the market is anticipating," Chad Morganlander, portfolio manager at Washington Crossing Advisors, told CNBC.

The U.S. dollar slumped to 13-month lows ahead of the meeting's start Tuesday. Nasdaq reported the dollar index, which measures strength against a trade-weighted basket of six major currencies, was down 0.33 percent to $93.59 Tuesday morning -- its weakest performance since last summer.

The dollar index has fallen about 2 percent so far this month, and is down 8 percent in 2017.

Instead of raising the federal funds rate Wednesday, which the Fed has already done multiple times this year, many expect the FOMC to examine continuing low inflation -- a key gauge of economic health. For many months, inflation has remained under the 2 percent threshold, which the Fed typically weighs to determine whether the economy can withstand a rate hike.

Advertisement

Latest Headlines