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Expectation & Prospect of Fed Interest Rate Decision on Wednesday
New Fed Chair: New Policy?
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Fed Interest Rate Decision and Fed’s Chair Press Conference from Wednesday, March 21st, 2018 at 18:00 GMT.
Last week, a poll revealed that economists see a steeper Fed rate path and a stronger inflation.
The expectations are that the Fed’s benchmark federal-funds rate will end the year at 2.25% from the current range between 1.25% and 1.50%.
This suggests either 3 or even 4 quarter-percentage point rate increase in 2018.
This may strengthen the USD more than expected.
Market experts are divided in 2 groups
Bullish factors for the USD
- The Fed is expected to raise rates in March and 2 or 3 more times during 2018
- The US job market exceeded the most optimistic expectations in March
Bearish factors for the USD
- Inflation is still laggard
- US trade policy is weighting on the US Dollar
- Markets are still indecisive regarding new Fed’s Chair Powell
What do you think?
Will the Fed raise rates at this meeting sending the dollar higher? Or will traders be disappointed by Powell’s words and send the dollar lower?
