What is expected from tomorrow’s meeting of the US Federal Reserve

The fact that at tomorrow’s meeting of the US Federal Reserve the key interest rates will be raised to 1.50% does not raise the question and the market has already taken into account the price of the American currency. The speculation of the American may be caused by the forecast of the Fed, which will also be published tomorrow, and a hint at the number of rate hikes in the next year. So the most optimistic signal from the Fed will be a hint of three or more rate increases in 2018. This will cause the widespread growth of the US currency and provoke large world CBs to tighten monetary policy.

A more pessimistic comment on monetary policy or a restrained tone that will not give hints for the number of rate hikes will be regarded by the market very negatively. Such an outcome is likely if the Fed prefers to take a wait-and-see position.

In addition to the publication of the US Federal Reserve, this day there will be a publication of data on inflation in the US and the speech of the US President D. Trump. If inflation data are taken into account in the protocol and have a relatively small impact on the market, Trump’s performance can significantly affect the dynamics of the American if it comes to monetary policy or political risks in the US.

Hanzenko Anton