What to expect from a meeting of the US Federal Reserve

Today, the results of the meeting of the US Federal Reserve will be published, from which, with almost complete confidence, the market expects a 25 bp increase in the key rate to the level of 1.75%. And this value has already been taken into account by the market in the price of the American currency. The main uncertainty and intrigue of the day is the press conference of the US Federal Open Market Committee. And this will be Powell’s first press conference in this position.

Recalling the first speeches of this politician at the post of head of the Fed, I would like to note his extremely hawkish tone, which later was repeated, but later was not received so positively because of the lack of actual confirmation. At the moment the head of the Federal Reserve Powell positions himself as a hawkish rhetoric. This can support the US currency in this situation.

The main support for the American will be a hint at four rate hikes this year. And it’s even better if this is a decided fact, as it was with the three rate hikes earlier. But, probably, the Fed will not go for it, leaving behind a place for a maneuver. At the same time, even hints of four increases in 2018 will be a significant incentive for strengthening of the American. The very publication of the protocol and the press conference of the Fed can be very volatile, despite the general positive expectations.

Graph of the US dollar index. The current price is 90.10.

Hanzenko Anton