What can we expect from the US Federal Reserve meeting this evening This evening?
The Fed will announce at 9:00 o'clock on Wednesday evening its decision on monetary policy, as the central bank is expected to keep interest rates unchanged at 5.25-5.50%.
But the interest rate decision will not be the main focus today, with no action expected at this and the next meeting at least, and all attention will be directed to the press conference that Jerome Powell will hold next, so what can we expect from the Fed Chairman ?
Taking into account the recent data, there is a high chance that we will see Powell's speech today less pessimistic today, and it is possible that he will be hawkish if he does not leave to cut interest rates this year or cut them once after it was three times at the last meeting.
As inflation has been more stable and the US economy continues to hold up well, Powell also changed his tone after the release of the Consumer Price Index report is high for the third time in a row, and stated that the recent data clearly did not give us more confidence, and that it will likely take longer than expected to achieve that confidence.
In response, the market pricing of the first interest rate cut from June to September has changed for the time being. The Fed Funds futures contracts also show a probability of more than 50% not to change interest rates until the end of the third quarter, that is, it is possible that it will not cut interest in September either.
The question now is: Will Powell give the markets a reason not to think about any interest rate cuts at all for 2024 ?
And any slight hint from Powell about keeping the door open to the possibility of raising interest rates again may be enough to give the dollar a very strong boost, and I think this is the only real risk of a more volatile market reaction today.
