At the post-meeting press conference, Fed Chair Kevin Warsh explained why policymakers decided to maintain interest rates following the October meeting and took questions from reporters about the decision.

Warsh’s press conference takeaways

The Committee believes more information will help determine the appropriate policy stance.

The Committee is looking out the window; things have not become easier.
Growth has strengthened.
Third-quarter GDP is likely to be above 3%.
Business investment is likely rising at a double-digit pace.
Payroll growth is above last year’s pace.
Employment conditions are positive.
Our responsibility is to get inflation down.
Discussion at the Fed focused mainly on its price-stability remit.
Credit conditions have tightened.
Market participants are becoming more discerning in their capital allocations.
We are unwilling and unable to call financial conditions tight.
The Committee had a good discussion.
They are moving in the direction of more durable economic growth and price stability.
The Committee discussed geopolitics and technology.
We are not surprised by bouts of financial-market volatility.
Real activity is pointing in the right direction.
Inflation is too high.
Our job is to ensure that relative price changes in some sectors do not broaden out.
Inflation expectations must remain anchored, as they are now.
We have made clear our readiness to act.
Information in the coming period will help us determine where we want policy to be.
Ensuring price stability and quashing inflation is not about an individual date or an isolated data point.
The Fed has put in place “new monetary medicine”.
In September, we removed a dose of accommodation.
Inflation compensation, as measured by swaps, is going in the right direction.
Inflation expectations have gone in the right direction despite an unsettled world.
I feel good about the signposts.
The period ahead is information-rich.
We are encouraged by the progress we have made.
We are working to deliver price stability.
The overwhelming judgement at the FOMC is that the monetary medicine is starting to work.
We decided to take stock of where we are and ask whether the period ahead will provide more clarity. Our judgement is that it will.
No ifs, ands or buts: we will deliver price stability.
Five task forces are hard at work and have held periodic check-ins.
There is no soft inflation target.
The price-stability target is 2%, measured by PCE.
Inflation expectations have risen in the near term, but longer-term measures show that households and businesses have confidence the Fed will deliver price stability.
There was a stable correlation between oil prices and market-set interest rates until recently.
Interest rates have rolled over to the downside.
I take note that oil futures prices have moved up.
I was sceptical that interest rates would not affect AI.
Rates affect almost everything.
Since early September, we have seen the effect of interest rates both inside and outside the technology complex.
Credit spreads have widened.
Some assets have seen wider credit spreads, while others have seen tighter financial conditions.
Interest rates do matter for new technology.
Capital expenditure is broadening.
The strength in capital expenditure is no longer confined to narrow pockets.
Politics played no role in the rate decision.

The Fed is changing its schedule

We have decided to change the FOMC schedule next autumn.

Eight meetings is the right number per year.
One meeting will not include a vote on the policy rate.
One meeting will focus on strategy.
We expect to have six policy-setting meetings in 2028.
It is important to reserve time and space for strategic deliberations over longer time horizons.
The new schedule will affect the nature and quality of these deliberations.

This section below was published at 18:00 GMT to cover the Federal Reserve's policy decisions and the immediate market reaction.

At its October meeting, the Federal Reserve (Fed) kept its Fed Funds Target Range (FFTR) unchanged at 3.75%–4.00%, right in line with what markets were expecting.

Highlights from the FOMC statement

The Fed leaves key overnight interest rates unchanged in the 3.75%-4.00% range, saying the accumulation of more information will help determine the appropriate policy stance.

Economic activity is expanding at a strong pace.
Inflation remains elevated.
Job gains have kept pace with the workforce, while the unemployment rate has changed little.
Domestic spending has been resilient despite elevated uncertainty.
Productivity growth is strong, and capital investment is robust.
The vote in favour of the policy was 10-2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favour of a 25-basis-point hike.

Market reaction to Fed policy announcements

The US Dollar (USD) remains practically muted following the Fed’s interest rate decision on Wednesday, with the US Dollar Index (DXY) navigating the low 102.00s amid marginal losses.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

This section below was published at 14:00 GMT as a preview of the Federal Reserve's policy announcements.

• The US Federal Reserve is widely expected to keep interest rates unchanged after the October meeting.
• Markets see a strong probability of a rate hike in December.
• Fed Chair Warsh’s remarks at the press conference could lift US Dollar volatility.

The United States (US) Federal Reserve (Fed) announces its Interest Rate Decision on Wednesday, following another pivotal meeting that could provide key insights into the bank’s monetary policy outlook heading into the end of the year.

Markets widely expect the Federal Open Market Committee (FOMC) to leave the policy rate unchanged in the range of 3.75%-4% following the 25 basis points (bps) hike announced in September.

This decision is almost fully priced in, with the CME FedWatch Tool pointing to about only a 9% chance of an increase in borrowing costs. Hence, Fed Chair Kevin Warsh’s comments in the post-meeting press conference could offer important clues on the rate outlook and drive the US Dollar’s (USD) valuation.

While speaking at an International Monetary Fund (IMF) event earlier in the month, Warsh reiterated that they remain focused on delivering price stability but added that he doesn’t believe in “pre-judging meetings.” This particular comment caused investors to effectively dismiss the possibility of a rate hike in October even though the US Consumer Price Index (CPI) for September came in hotter than expected, with the headline annual inflation rate rising to 3.7% from 3.4%.

Economists at Deutsche Bank note that with a rate move largely off the table at the upcoming meeting, market attention will pivot to the communication tone, noting that “the interest will therefore be in Chair Warsh’s press conference and how the Fed balances still-elevated inflation and solid growth against the recent tightening in financial conditions.” They suggest the policy message will be judged on how convincingly the Fed acknowledges persistent price pressures and robust activity while also addressing the impact of more restrictive market conditions on the broader outlook.

When will the Fed announce its interest rate decision and how could it affect EUR/USD?

The Fed is scheduled to announce its Interest Rate Decision and publish the Monetary Policy Statement on Wednesday at 18:00 GMT. This will be followed by Fed Chair Kevin Warsh’s press conference starting at 18:30 GMT.

In September, the revised Summary of Economic Projections (SEP) showed that 12 of 18 officials penciled in one more 25-basis-point (bps) rate hike this year, while four members saw two hikes and two projected no more hikes.

In June, the dot plot, the component of the SEP that shows policymakers’ interest rate forecasts, highlighted that policymakers’ projections implied only a 25 bps increase in 2026, followed by a 25 bps rate cut in 2027 and another 25 bps cut in 2028.

According to the CME FedWatch Tool, there is only about a 17% chance the policy rate will remain unchanged at the end of the year. This market positioning suggests there is room for renewed USD strength in case Warsh goes against his prior comments at the IMF event and hints at an interest rate increase in December, citing persistently high inflation. In this scenario, EUR/USD could come under bearish pressure in the immediate reaction. It is worth noting, however, that the European Central Bank (ECB) will also announce its policy decision on Thursday. Thus, a potential decline in the currency pair on a hawkish Fed tone could pause heading into the ECB event.

Analysts at MUFG/BTMU highlight that “the final FOMC meeting of the year is not until 9th December,” and note that “the signs of tightening financial conditions continue to build,” leaving “certainly a chance that Fed rate hike expectations for December could ease.” In their view, “the willingness of Warsh to signal the Fed remains on the path highlighted by the dots will be important.” MUFG/BTMU add that “in circumstances of tightening financial conditions and bond market volatility in Europe we would assume the Dollar will remain underpinned, and the risks remain skewed to the upside.”

Conversely, the Greenback could weaken against its major currency rivals if Fed Chair Warsh downplays the inflation developments and refrains from signalling a rate hike in December. In case Warsh repeats that he won’t pre-judge the outcome of the last meeting of the year, investors could refrain from fully pricing in a rate hike and help EUR/USD edge higher. Still, market participants are unlikely to dismiss this probability unless they see a significant improvement in inflation data or a horrible employment report.

Commerzbank’s Thu Lan Nguyen points out that the recent resilience in EUR/USD masks a more troubling underlying dynamic for the single currency. She notes that “short-term inflation expectations have risen more strongly in the Euro Area than in the US,” yet “higher inflation expectations are currently not being offset by a corresponding shift in relative interest-rate expectations.” According to Commerzbank, this disconnect “is, in principle, a negative signal for the Euro,” as it suggests that markets are not pricing in sufficient policy tightening to counter the pickup in Euro Area inflation expectations, potentially leaving the currency vulnerable if sentiment turns.

Eren Sengezer, FXStreet European Session Lead Analyst, provides a short-term technical outlook for EUR/USD:

“The near-term technical outlook for EUR/USD highlights a bearish bias as the pair remains in the lower half of the Bollinger Band on the daily chart and the Relative Strength Index stays well below 40. On the downside, 1.1130-1.1100 (lower limit of the Bollinger Band, static level) aligns as the immediate support level ahead of 1.1000 (psychological level, static level). If this latter support fails, a deeper pullback toward 1.0750 (static level) could be witnessed. If the daily RSI falls into the oversold territory below 30 and EUR/USD stays below the lower limit of the Bollinger Band, investors could wait for a technical correction before committing to an extended decline.”

“Looking north, an interim resistance area could be spotted at 1.1260 - 1.1300 (static level, upper limit of the Bollinger Band). In case the pair manages to stabilize above this region, the 50-day and the 100-day Simple Moving Averages in the 1.1420-1.1440 area could become the next difficult hurdle to clear.”

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.