As it was widely expected by the market, the US Federal Reserve left its benchmark interest rate unchanged. Investors had predicted such Fed’s decision long before the Federal Open Market Committee meeting took place. So, the traders’ reaction to this event was rather sluggish. On the other hand, the Fed has raised the interest rate on excessive reserves, or IOER, to 1.6% from 1.55% which goes well in line with the regulator’s policy, announced earlier. However, this change did not impress the market players who got much more interested in the Fed’s annual membership reshuffle. Every year, members of the Federal Open Market Committee, which include the board of governors and heads of the regional Fed banks, rotate to gain a formal vote on monetary policy decisions. This annual rotation means that four new regional Fed bank presidents join the Federal Reserve’s rate-setting panel, thus gaining the right to vote on interest rates. This year, the new policymakers are said to be slightly less hawkish than the previous ones. So, investors are looking ahead to further easing of the US monetary policy.
