At 11:00 PM Dubai time, the markets expect the latest US interest rate data from the Fed. Expectations indicate that interest rates will stay fixed at current levels of 5.5%.
The interest rate announcement will be followed by a press conference by the Chairman of the Federal Reserve, with investors watching for any hints regarding future interest rate cuts. Investors will also be particularly interested to know what price ranges the Federal Reserve will target, aiming to balance inflation and economic stability.
Economic data that the Fed relies on before making any monetary policy decisions show a strong US economy that has not been significantly affected by rising interest rates. However, the data also indicates that inflationary pressures are still present, which will likely make the Fed more cautious before altering its tighter policy.
Here are the expectations for Jerome Powell’s statements and potential market moves.
- Powell will open the door to all expected possibilities, especially since inflation has risen to 3.4% and is still higher than the Fed’s target.
- Markets will experience strong volatility between highs and lows, taking some time before stabilizing toward a specific direction.
According to analysts, any terminology from the Fed chairman that suggests a continuation of stricter policy may be positive for the dollar and negative for stocks, metals, and other currencies. On the other hand, any hints indicating the potential for lowering interest rates may be in favor of stocks and metals while weighing negatively on the dollar.
Remember that markets have different ideas and beliefs in interpreting the information issued. Therefore, prices cannot move 100% according to that information.
The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFl makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.