Market update: FOMC announcement of no rate hike (20 March 2019)

The Federal Reserve says it will leave interest rates unchanged until it sees whether the economy stabilizes as the stimulative effect of 2017 tax cuts fades, and has downgraded its forecast of US economic growth slightly from 2.3% to 2.1%. Chairman Jerome Powell says the central bank expects the modest economic slowdown "with overall conditions remaining favorable."

• Fed leaves rates unchanged at 2.25-2.50%, as widely expected; Signals no rate hike this year.
• Leaving the fed funds rate intact was widely expected. Projecting zero rate hikes in 2019 -- and only one in 2020 -- along with providing an end date for its balance sheet runoff was less expected. These actions made it clear that the market doesn't have to fear the Fed like it did in the fourth quarter.
• A dovish Fed reignited slowdown worries

Fed Chair Jerome Powell says economy is in a good position and it will use monetary policy to keep it there

• Fed will remain patient on monetary policy.
• Conditions are less supportive of growth than in 2018.
• Notes weakness in Europe and China.
• Limited data for this year has been mixed; Notes Feb jobs number.
• Business fixed investment growing slower y/y;
• Inflation has been muted; 
• Brexit and trade negotiations pose risk to the outlook.

Closing Commodities: WTI oil prices settles above $60/barrel, near its HoD

• Metals Settlement Prices:
  • Apr gold settled today's session $5.60 lower (-0.4%) at $1301.25/oz
  • May silver settled today's session $0.05 lower (-0.3%) at $15.32/oz
  • May copper settled $0.01 lower (-0.3%) at $2.92/lb
• Agriculture Settlement Prices:
  • May corn settled unchanged at $3.71/bushel
  • May wheat settled $0.08 higher (+1.8%) at $4.64/bushel
  • May soybeans settled $0.01 higher at $9.05/bushel
• Energy Settlement Prices:
  • Apr crude oil futures rose $0.86 (+1.4%) to $60.20/barrel
  • Apr natural gas settled $0.05 lower (-1.7%) at $2.82/MMBtu
  • Apr RBOB gasoline settled $0.02 higher (+1.1%) at $1.91/gallon
  • Apr heating oil futures settled $0.02 higher (+1.0%) at $2.01/gallon