FOCUS OF THE DAY: The Fed’s decision on the interest rate
Dear traders,
Almost all analysts are sure that the Fed will raise the interest rate by a quarter point a second time this year as a result of its two-day meeting on Wednesday. The decision of the Federal Reserve on Monetary Policy will be announced today, at 21:00 Kyiv.
As a result, the range of the federal funds rate will be raised to 1.75-2.00%, approaching closer to normal monetary policy.
Half an hour after the statement by the US Federal Open Market Committee, Federal Reserve Chairman Jerome Powell will hold a press conference. Investors will wait for new information on how Powell assesses inflation growth, what he is thinking about further tightening of monetary policy by the end of the year.
Another important point will be Powell’s assessment of growing external risks, including the possibility of a global trade war and the recent signs of instability in the markets of developing countries.
The US Central Bank will also publish its forecasts on economic growth and interest rates – the so-called dot-graph (dot-plot). The main question is whether the Fed will raise the forecast of the number of interest rate increases this year and next year, as a result of which the so-called neutral interest rate can be reached earlier than previous estimates.
The likelihood of four interest rate increases in 2018 has recently grown against the backdrop of signals about accelerating inflation and economic growth.
The next week’s economic calendar also has important reports on inflation and retail sales in the US, PPI and industrial production, as well as the manufacturing activity index in the state of New York. (Investing.com)
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