The Federal Reserve kept interest rates unchanged following the conclusion of its two-day policy meeting on Wednesday, a move that was largely expected by markets. The central bank did not explicitly signal when the next interest rate hike would come, but said economic activity in the U.S. was “rising at a solid rate.”
Still, markets took that as an indication that the Fed would likely raise interest rates in December. Odds for a December rate hike stood at 96.7 percent, according to the CME Group’s FedWatch tool early on Thursday.
Meanwhile, President Donald Trump will choose Fed Governor Jerome “Jay” Powell to be the next chair of the central bank, the Wall Street Journal said, citing a source. Trump is due to make his formal announcement on the matter on Thursday U.S. time. Current Fed chair Janet Yellen’s term will expire in February 2018.
Economic data released on Wednesday showed the U.S. economy was chugging along solidly. The ISM manufacturing index in October hit 58.7, a touch better than the 58.6 forecast in a Reuters poll. Meanwhile, a total of 235,000 private-sector jobs were created in October, above an estimate of 200,000 forecast by economists in a Reuters survey. Nonfarm payrolls numbers are expected on Friday during U.S. hours.
Ahead, investors will keep an eye on the Bank of England, which is expected to raise interest rates for the first time in more than 10 years on Thursday.
