FOMC Preview
July 31, 2019
In the six weeks since the last scheduled FOMC meeting, the dollar has edged up 0.2% against the yen and 0.8% versus the euro. It’s been a period in which Fed officials have prepared markets rhetorically to expect an interest rate cut today, so it’s somewhat surprising that the 10-year Treasury yield is now only five basis points lower than when the last meeting’s decision was announced and no different from the level at which it closed that day. Over these six weeks, the biggest market reactions to a likely easing in end-July have been a 9% increase in the price of oil and a 3% advance in the DOW.
At one point in these six weeks, the possibility that the FOMC might even cut the interest rate by 50 basis points gained some favor, but such a move is now considered less likely than a cut of 25 basis points. A big area of suspense involves forward guidance. Will today’s move be framed as the first of several or one that only will be augmented down the road if forthcoming data warrant more easing?
Several other central banks have cut rates recently, and both the ECB and BOJ have adjusted their forward guidance to suggest easing in the future. If most central banks ease in tandem and if the Fed is seen to be doing the White House’s bidding, the Treasury yield curve would be apt to steepen, but the dollar might weaken not so much because of interest rates — differentials would not change much — as in reaction the Fed’s eroded credibility.
EUR/$ | $/JPY | 10Y, % | DJIA | Oil, $ | |
06/30/04 | 1.2173 | 109.44 | 4.63 | 10396 | 37.95 |
06/30/05 | 1.2090 | 110.89 | 3.96 | 10370 | 57.00 |
06/29/06 | 1.2527 | 116.07 | 5.20 | 11077 | 73.41 |
06/28/07 | 1.3452 | 123.17 | 5.10 | 13456 | 69.82 |
08/07/07 | 1.3749 | 118.55 | 4.73 | 13510 | 72.27 |
09/18/07 | 1.3888 | 115.75 | 4.51 | 13475 | 81.42 |
10/31/07 | 1.4458 | 115.28 | 4.42 | 13873 | 93.59 |
12/11/07 | 1.4682 | 111.49 | 4.11 | 13645 | 89.78 |
01/30/08 | 1.4792 | 107.31 | 3.70 | 12454 | 91.70 |
03/18/08 | 1.5786 | 98.73 | 3.41 | 12257 | 107.53 |
04/30/08 | 1.5562 | 104.58 | 3.83 | 12953 | 111.54 |
06/25/08 | 1.5568 | 108.37 | 4.18 | 11837 | 133.62 |
08/05/08 | 1.5445 | 108.42 | 3.97 | 11484 | 119.82 |
09/16/08 | 1.4144 | 105.16 | 3.36 | 10936 | 91.18 |
10/08/08 | 1.3625 | 99.87 | 3.50 | 9447 | 87.02 |
10/29/08 | 1.2933 | 97.15 | 3.81 | 9145 | 67.38 |
12/16/08 | 1.3790 | 90.14 | 2.52 | 8687 | 44.14 |
01/28/09 | 1.3253 | 90.01 | 2.61 | 8356 | 42.92 |
03/18/09 | 1.3115 | 98.13 | 2.94 | 7340 | 47.73 |
04/29/09 | 1.3331 | 97.06 | 3.02 | 8194 | 51.05 |
06/24/09 | 1.3984 | 95.43 | 3.59 | 8373 | 68.76 |
08/12/09 | 1.4221 | 96.17 | 3.71 | 9366 | 70.64 |
09/23/09 | 1.4779 | 91.50 | 3.50 | 9859 | 69.13 |
11/04/09 | 1.4884 | 90.75 | 3.51 | 9896 | 80.66 |
12/16/09 | 1.4542 | 89.78 | 3.56 | 10478 | 73.14 |
01/27/10 | 1.4045 | 89.49 | 3.61 | 10148 | 73.31 |
03/16/10 | 1.3756 | 90.64 | 3.67 | 10645 | 81.45 |
04/28/10 | 1.3157 | 94.10 | 3.75 | 11043 | 82.57 |
06/23/10 | 1.2284 | 90.12 | 3.13 | 10307 | 76.50 |
08/10/10 | 1.3107 | 85.85 | 2.81 | 10605 | 79.94 |
09/21/10 | 1.3132 | 85.21 | 2.66 | 10747 | 73.05 |
11/03/10 | 1.4059 | 81.35 | 2.53 | 11174 | 84.59 |
12/14/10 | 1.3423 | 83.37 | 3.38 | 11497 | 88.47 |
01/26/11 | 1.3658 | 82.55 | 3.41 | 12001 | 87.36 |
03/15/11 | 1.3969 | 81.04 | 3.29 | 11815 | 98.09 |
04/27/11 | 1.4665 | 82.63 | 3.36 | 12612 | 112.48 |
06/22/11 | 1.4392 | 80.12 | 2.97 | 12175 | 94.87 |
08/09/11 | 1.4234 | 77.09 | 2.36 | 10993 | 81.76 |
09/21/11 | 1.3778 | 76.34 | 1.93 | 11377 | 86.74 |
11/02/11 | 1.3724 | 78.11 | 2.03 | 11805 | 92.77 |
12/13/11 | 1.3067 | 77.92 | 1.98 | 12130 | 100.20 |
01/25/12 | 1.3027 | 77.96 | 1.97 | 12670 | 98.85 |
03/13/12 | 1.3096 | 82.76 | 2.08 | 13044 | 106.34 |
04/25/12 | 1.3226 | 81.37 | 1.97 | 13096 | 104.13 |
06/20/12 | 1.2693 | 79.28 | 1.66 | 12837 | 83.63 |
08/01/12 | 1.2300 | 78.10 | 1.49 | 13028 | 88.98 |
09/13/12 | 1.2895 | 77.43 | 1.72 | 13342 | 97.60 |
10/24/12 | 1.2948 | 79.75 | 1.77 | 13115 | 85.72 |
12/12/12 | 1.3082 | 83.24 | 1.70 | 13325 | 87.13 |
01/30/13 | 1.3584 | 91.16 | 2.02 | 13949 | 97.63 |
03/20/13 | 1.2948 | 95.65 | 1.94 | 14497 | 92.82 |
05/01/13 | 1.3195 | 97.48 | 1.62 | 14740 | 90.47 |
06/19/13 | 1.3364 | 95.76 | 2.23 | 15304 | 98.38 |
07/31/13 | 1.3301 | 97.92 | 2.67 | 15565 | 105.63 |
09/18/13 | 1.3363 | 98.28 | 2.76 | 15606 | 107.01 |
10/30/13 | 1.3764 | 98.18 | 2.48 | 15660 | 97.42 |
12/18/13 | 1.3696 | 103.81 | 2.89 | 16198 | 98.06 |
01/29/14 | 1.3651 | 102.13 | 2.73 | 15719 | 97.23 |
03/19/14 | 1.3918 | 101.75 | 2.71 | 16335 | 99.96 |
04/30/14 | 1.3868 | 102.11 | 2.66 | 16553 | 99.52 |
06/18/14 | 1.3584 | 101.93 | 2.61 | 16892 | 106.12 |
07/30/14 | 1.3372 | 102.84 | 2.51 | 16878 | 101.45 |
08/17/14 | 1.2961 | 107.60 | 2.57 | 17151 | 94.05 |
10/29/14 | 1.2677 | 108.40 | 2.33 | 16956 | 82.51 |
12/17/14 | 1.2409 | 117.58 | 2.11 | 17201 | 57.85 |
01/28/15 | 1.1337 | 117.77 | 1.78 | 17457 | 44.75 |
03/18/15 | 1.0637 | 120.98 | 2.05 | 17733 | 42.49 |
04/29/15 | 1.1164 | 118.67 | 2.05 | 18039 | 59.16 |
06/17/15 | 1.1255 | 124.22 | 2.39 | 17862 | 59.12 |
07/29/15 | 1.1073 | 123.61 | 2.29 | 17720 | 49.17 |
09/17/15
10/28/15 |
1.1334
1.1081 |
120.86
120.50 |
2.26
2.07 |
16778
17687 |
47.01
45.83 |
12/16/15
01/27/16 03/16/16 04/27/16 06/14/16 07/27/16 09/21/16 11/02/16 12/14/16 02/01/17 03/15/17 05/03/17 06/14/17 07/25/17 09/20/17 11/01/17 12/13/17 01/31/18 03/21/18 05/02/18 06/13/18 08/01/18 09/26/18 11/08/18 12/19/18 01/30/19 03/20/19 05/01/19 06/19/19 07/31/19 |
1.0956
1.0874 1.1089 1.1339 1.1205 1.0998 1.1160 1.1099 1.0641 1.0741 1.0638 1.0910 1.1149 1.1735 1.2010 1.1631 1.1815 1.2424 1.2271 1.1963 1.1788 1.1668 1.1765 1.1400 1.1420 1.1415 1.1355 1.1244 1.1217 1.1128
|
121.72
118.48 113.70 111.37 106.15 105.65 100.84 103.33 115.37 113.52 114.48 112.47 111.55 111.17 111.34 113.91 112.58 109.31 106.27 109.91 110.38 111.69 112.94 113.88 112.26 109.55 111.42 111.17 108.36 108.59
|
2.29
2.02 1.99 1.89 1.62 1.53 1.70 1.78 2.45 2.49 2.57 2.30 2.13 2.29 2.24 2.35 2.34 2.73 2.89 2.97 2.96 2.99 3.08 3.23 2.81 2.72 2.57 2.48 2.08 2.03 |
17583
16002 17217 18013 17675 18461 18151 17989 19915 19890 20885 20920 21375 21711 22376 23405 24585 26259 24839 24095 25309 25310 26543 26195 23881 24841 25727 26624 26452 27218 |
35.95
30.85 37.79 44.89 48.29 41.91 43.44 45.18 51.83 53.33 48.43 47.96 44.71 48.75 50.55 54.24 56.60 64.41 65.00 67.57 66.77 67.62 71.68 60.93 47.80 54.51 59.48 63.38 53.65 58.47 |
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: FOMC preview