(LIVE) Powell's press conference

Fed left interest rates unchanged in the 5.25-5.50% range, in-line with market expectations. Statement repeated that FOMC needs greater confidence in inflation returning to target before cutting rates. Apart from that, policy statement contained some minor changes to the wording, like saying that 'some' progress was made to the goal instead of 'modest' progress, and a hint that Fed is now highly attentive to risk on both sides of dual mandate rather than highly attentive to inflation risks like it was the case in June statement. Markets' reaction was slightly hawkish with USD gaining and gold dropping in the first minutes after the decision, and investors shifted their attention to Fed Chair's press conference for more hints.

Post-decision press conference of Fed Chair Powell began at 7:30 pm BST. Below are key takeaways (live updates).

Opening statement

• Labor market has come into better balance
• Inflation has eased substantially from a peak of over 7%
• Pace of spending has slowed but remains solid
• Recent indicators suggest the economy has continued to expand at a solid pace
• Investment stalled in Q2 in the housing sector
• Data suggests that the labor market has returned to where it was on the eve of pandemic
• A broad set of labor market indicators show it is strong, but not overheated
• Inflation remains somewhat above the 2% goal
• Long-term inflation expectations appear well-anchored
• We need greater inflation on inflation
• Second quarter's inflation readings have added to our confidence in inflation
• We will carefully assess incoming data for future decisions
• Policy is well-positioned
• Reducing too late could unduly weaken economy

Q&A session

• We have made no decisions about future meetings, including September
• There is a broad sens at the FOMC is we are moving closer to the goal
• A rate cut could be on the table in September
• If inflation moves down in-line with expectations, growth remains reasonably strong and labor market remains as it is, it could justify a rate cut in September [USD weakened]
• I can imagine scenario of 0 cuts to several cuts this year, depending on how economy evolves
• We don't think of the labor market as it is currently as a likely source of inflation pressures
• If we see something that looks like significant downturn in labor market, we would respond
• All the data continues to point in a direction we want to see
• It is coming to the time to adjust rates to support our continued process
• We don't need to be 100% focused on inflation
• The job is not done on inflation, but we can afford to begin to dial back restrictiveness of the policy
• In a base case, you would think policy rates would move down from here
• We are now getting broader disinflation [USD weakened further]
• Upside risks to inflation have decreased as the job market cooled
• Downside risks to employment mandate are real now
• All 19 FOMC members supported today's decision
• There was a real discussion about the case for reducing rates, but strong majority supported not making a move at this meeting

Overall, Powell sounded slightly dovish during the press conference. USD weakened, with EURUSD jumping above 1.0820, while gold climbed to daily highs above $2,430 per ounce. S&P 500 (US500) gained around 0.5% during Powell's press conference and is also trading at daily highs.