[My View on This Morning's Economy] Early this morning, the Fed did not move interest rates. It was the market that moved.

One piece of news this morning

When I checked the results first thing this morning, my first thought was, "They didn't move them?" Then I opened the list of interest rates and thought, "But wait, they are moving."

The meeting where the U.S. central bank (the Fed) decides interest rates (the FOMC) released its results at 3:00 AM Japan time early this morning. It was July 29th locally. The policy interest rate was left unchanged. They haven't moved it for the past five meetings.

However, on the same day, the interest rates determined by the market were moving. Moreover, they were moving in opposite directions: short-term rates (2-year) were falling, while long-term rates (30-year) were rising. The long-term rate reached its highest level in 19 years. The stock market wasn't quiet either. The Dow Jones Industrial Average fell by more than 2%.

The breakdown of the vote was even more surprising. It wasn't a unanimous decision; three out of the 12 members cast dissenting votes, arguing that rates should be raised this time.

My view

I interpreted this as the side that lends money for long periods not welcoming the decision to "not move" rates.

For someone lending money over a 30-year period, the biggest problem is persistent high inflation. If the people deciding interest rates won't raise them, they have no choice but to raise their own lending rates—that upward movement looked like an expression of that intent. On the other hand, the reason short-term rates fell is likely because the market sees that it will be their turn to be lowered before long.

What caught my attention is that this is a record of a "day where nothing was done." The headline ends with the three characters for "unchanged." Yet, from last night to this morning, long-term interest rates hit a 19-year high and stocks fell. Even though the decision was to "not move," many things moved.

So, what will I do?

Here, it has become about me.

I, too, basically do not move. Whether the market goes down or up, I don't touch what I hold. I think that is fine.

However, looking at that list of interest rates this morning, I realized that I had been conflating one thing. I thought I had chosen to "do nothing," but I had somehow started to feel as if I had chosen for "nothing to happen." Prices move even while I am not touching them, and the moment I decide not to move, I have accepted those movements.

The explanation that "it's safer not to touch it" doesn't quite sit right with me this morning. It's not that I don't move because it's safe, but rather that I don't move because I have decided to accept what is moving—that must be the order of things.

Having written that much, I still haven't decided what to watch starting tomorrow. I won't touch what I hold today either. That is the only thing decided, and the rest remained undecided as morning arrived.

A word for today

Tonight, U.S. growth and inflation figures will be released. The Bank of Japan's results will be out tomorrow at noon.

It might be Japan's turn to choose to "not move" next. Even if that happens, I think something will probably move.

Note: This article is for informational purposes only and does not recommend the buying or selling of any specific financial products. Please make investment decisions at your own discretion.

This is a morning economic column brought to you by ichido-studio. A detailed summary of the previous day's market can also be found in "Money Bye-Bye Man's Economic News" ({https://okanebye-man.com).