LIVE MARKETS-Fed steady; Stocks stable

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FED STEADY; STOCKS STABLE

The Federal Reserve held interest rates steady on Wednesday in a split decision that gave little indication of when borrowing costs might be lowered and drew dissents from two of the U.S. central bank's governors, both appointees of President Donald Trump who agree with him that monetary policy is too tight.

Based on interest rate probabilities, 44.3 basis points (bps) of cuts are now expected through year-end vs 44.1 bps just before the statement hit the wires. With this, stocks are little changed.

The S&P 500 index .SPX is up around 0.2% on the day, which is roughly flat with where it was just before the statement was released.

The U.S. 10-Year Treasury yield US10YT=RR is now around 4.35% which is roughly flat with where it was just before the statement came out. The yield ended Tuesday at 4.328%.

Regarding the Fed's statement, Brian Jacobsen, chief economist at Annex Wealth Management, in Menomonee Falls, Wisconsin, said:

"There is the clear and present danger of slower growth while the risk of inflation is more speculative and likely a one-off event even if it does happen. Tariffs don’t have to hit consumer prices if businesses are absorbing the cost. That dynamic leads to slower growth, not higher consumer price inflation."

Jacobsen added "The Fed probably wishes it waited until next Wednesday to have this meeting so they could have the employment numbers to look at. It’s setting up to be an awful lot like last year when, in hindsight, they wished they’d have cut in July and so they did a catchup-cut in September."

Markets now await Fed Chair Powell's press conference at 2:30 p.m. EDT.

Here is a snapshot of where markets stood on the day at 2:20 p.m. EDT:

(Terence Gabriel, Chuck Mikolajczak)

EARLIER ON LIVE MARKETS:

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FEED THE FED: GDP, ADP, PENDING HOME SALES, MORTGAGE DEMAND CLICK HERE

DO RECORD STOCK HIGHS MEAN FED SHOULD STAY ON HOLD? CLICK HERE

U.S. STOCKS STEP CAUTIOUSLY AHEAD OF THE FED CLICK HERE

BENCHMARK TREASURY YIELD: A COMING SURPRISE UP ITS SLEEVE? CLICK HERE

PREPARE FOR NEAR-TERM VOLATILITY - UBS CLICK HERE

TIME TO BE SELECTIVE: RETHINKING THE INSURANCE TRADE CLICK HERE

STOXX FLAT, ENERGY HITS OVER 1 YEAR HIGH CLICK HERE

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NO MORE SLEEP THIS WEEK CLICK HERE