Bill Diviney, senior economist at ABN AMRO, notes that the FOMC kept the target range of the fed funds rate on hold yesterday, though in a technical move, but lowered the IOER by 5bp.

• The statement upgraded the language on recent economic activity, which it said "rose at a solid rate" (previously "had slowed"), while acknowledging the slowdown in consumption and investment in Q1.
• In the press conference, Chair Powell also sounded less concerned about global risk factors such as the slowdown in China and Europe, the risk of a disorderly Brexit, and China-US trade tensions.
• Our base case continues to be the Fed keeping rates on hold through our forecast horizon to end-2020.
• The effective fed funds rate has drifted close to the top end of the target range of 2.25-2.50% in recent weeks, and this prompted the third technical adjustment to the IOER, which was reduced by 5bp to 2.35%. As expected, Chair Powell stressed that this had no bearing on the stance of monetary policy, and was purely to better anchor the fed funds rate within the target range.