FOMC Holds Rates Steady for Fifth Meeting as Bond Yields Climb

MacroEarnings Impact 4

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Summary · why it matters

The Federal Open Market Committee kept the federal funds rate at 3.50 to 3.75 percent for the fifth consecutive meeting, with three dissenting members voting for a 25-basis-point hike. Fed Chair Warsh emphasized the 2 percent inflation goal and attributed elevated inflation to supply shocks, including oil price increases tied to the war in Iran. The 10-year Treasury yield rose from 4.63 percent to 4.69 percent during the session, while the 2-year yield edged down to 4.26 percent, widening the yield curve beyond 40 basis points for the first time in several sessions. After the bell, Meta Platforms shares fell 7 percent after reporting mixed fiscal second-quarter results, with earnings of 6.18 dollars per share missing the Zacks consensus and revenues of 60.80 billion dollars beating estimates. Microsoft posted earnings of 4.74 dollars per share on revenues of 90.01 billion dollars, both above expectations, aided by a 3.2-billion-dollar gain from Anthropic and 43 percent Azure growth. Qualcomm shares dropped 4.4 percent on a one-cent earnings miss to 2.21 dollars per share, while Starbucks beat earnings estimates with 85 cents per share but missed on revenues at 9.3 billion dollars, and Chipotle Mexican Grill modestly outperformed with earnings of 33 cents per share on revenues of 3.35 billion dollars.