What is expected of the US Federal Reserve meeting?

Today’s meeting of the US Federal Reserve will be passing. It means that the text of the protocol will not contain economic forecasts and the press conference of Fed Chairman Powell will not follow it. At the same time, there is a high probability that the overall tone will coincide with the September protocol, while interest rates will remain at the same level of 2.22%. At the same time, the market will expect confirmation of the rate hike in December or January. US economic indicators remain positive, confirming the latest report on US employment. Therefore, there is a high probability that the Fed will signal an increase in rates. Democratic victory in the midterm elections in the United States has little impact on Fed policy.

The US dollar index is very restrained in anticipation of the publication of the Fed’s protocol, but positive expectations contribute to the restrained growth of the American dollar. Confirming expectations for an increase in rates will accelerate the growth of the dollar to resistance levels: 96.50 and 96.80. At the same time, a moderate tone can be viewed by the market as a negative signal and resume the downward trend in the American dollar.

The US dollar index chart. The current price is 96.10 (10-year government bonds yield is the blue line)

Read also: “Martingale and the application of its strategy on cross-rates”

Hanzenko Anton

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