The Federal Reserve held interest rates steady, in line with expectations, adding confidence to a thriving economy. US GDP growth data confirmed this, with a Q3 jump to 3.4%, reflecting the strength of the US consumer. The Fed’s preferred gauge of inflation, the PCE Indicator, pushed up to 3.4%. This was within market expectations and completely predictable, considering the current energy crisis. The US Dollar was steady, with the EUR trading 1.1150, while the GBP improved to 1.3350.The NZD dollar stabilised, trading around 0.5630, following the post-RBNZ rate decision crash. The RBNZ may seem somewhat vindicated in their brave pre-election hold, now the Fed has done the same, for the same reasons. Inflation may be hot, but the Central Bank decision to hold rates steady before the election, appears to be the correct one. It was the misread by markets that caused the currency to suffer. The AUD remains bid, trading 0.7030, supported by yesterday’s elevated inflation reading.
