The US Federal Reserve held its benchmark rates unchanged at 4.25-4.50% for the fourth straight meeting, it said in a statement (pdf). Solid market conditions, low levels of unemployment, and a solid pace of economic growth, were cited as reasons in a statement, which noted inflation is still “somewhat elevated.” The last time the Fed cut interest rates was in December, when it cut rates by 25 bps.

Incoming economic uncertainty? Persistent concerns about an incoming uptick in inflation and unemployment on the back of US President Donald Trump’s tariff agenda, the effects of which are expected to be felt soon, are also factors in the decision, according to statements from Fed Chair Jerome Powell cited by Reuters. Economic projections released alongside the decision show the Fed now expects weaker economic growth — downgraded to 1.4%, from 1.7% earlier — and higher unemployment.

As expected: A Reuters poll from 105 economists had seen all but two predict the Fed to leave interest rates where they have been since the start of the year. Recent labor statistics from the US Treasury also made the case for keeping benchmark rates unchanged, as officials stay the course on a “wait-and-see approach [that] has served them well up until this point,” Deutsche Bank AG economist Brett Ryan told Bloomberg.

Market reax: The S&P 500 fell following the Fed’s announcement, while the Nasdaq inched up 0.1%. Meanwhile, the yield on the 10-year US Treasury note ended the day nearly flat.

Someone won’t be happy: US President Donald Trump has openly called on the Fed to slash rates by a full percentage point. This time he’s been complaining of the cost of high interest rates on fiscal buffers as the US government faces refinancing a huge swathe of maturing debt, Bloomberg reported earlier this week. Treasury stats showed the government paid USD 776 bn over the past eight months in interest fees for its debt.

Most Fed policymakers still expect two rate cuts this year, though division is rising as a minority see no rate cuts needed this year, while others see a need for more than two. Powell downplayed this to say “no one holds these rate paths with a lot of conviction.”

MARKETS THIS MORNING-

Asian markets are in the red following the Fed’s move, with Japan’s Nikkei leading losses at 0.7%, South Korea’s Kospi falling around 0.3%, and Hong Kong’s Hang Seng losing nearly 0.5%. Over on Wall Street, futures also point to a weaker open.

EGX30

30,839

+0.4% (YTD: +3.7%)

USD (CBE)

Buy 50.48

Sell 50.61

USD (CIB)

Buy 50.50

Sell 50.60

Interest rates (CBE)

24.00% deposit

25.00% lending

Tadawul

10,591

-1.2% (YTD: -12.0%)

ADX

9496

-0.4% (YTD: +0.8%)

DFM

5306

-1.2% (YTD: +2.9%)

S&P 500

5981

-0.03% (YTD: +1.7%)

FTSE 100

8843

+0.1% (YTD: +8.2%)

Euro Stoxx 50

5267

-0.4% (YTD: +7.6%)

Brent crude

USD 76.60

+0.3%

Natural gas (Nymex)

USD 3.99

+3.6%

Gold

USD 3386.40

-0.6%

BTC

USD 104,702.00

+0.1% (YTD: +12.0%)

S&P Egypt Sovereign Bond Index

878.56

-0.02% (YTD: +13.0%)

S&P MENA Bond & Sukuk

144.18

-0.1% (YTD: +3.0%)

VIX (Volatility Index)

20.14

-6.8% (YTD: +16.1%)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 2.7 bn (54.1% below the 90-day average). Local investors were the sole net sellers. The index is up 3.7% YTD.

In the green: Fawry (+4.1%), Oriental Weavers (+4.0%), Orascom Construction (+2.8%).

In the red: Eastern Company (-3.0%), EFG Holding (-2.0%), and Mopco (-2.0%).

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