Philip Marysenior strategist at rabbank in the US, provided a brief summary of the upcoming FOMC monetary policy decision on Wednesday. The central bank is practically ready to raise interest rates by 75 basis points and keep the door open for further tightening about politic.
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“The FOMC will kick off its two-day meeting leading up to tomorrow’s rate decision, formal statement and Fed Chairman Powell’s press conference. We expect the FOMC to raise the target range for the fed funds rate by 75 basis points, to 2.25-2.50% Meanwhile, the balance sheet reduction schedule is expected to remain unchanged.or there will be an update of the economic projectionsso we can only wait for Powell’s formal statement and press conference.”
“Although FOMC speakers have pushed against a 100 basis point rate hike this month, Powell could shed more light on rate path beyond July, especially in relation to the stronger than expected CPI data on July 13th. As headline inflation rose to 9.1% in June from 8.6% in May, versus a Bloomberg consensus expectation of 8.8%, markets initially increased their speculation of a 100 basis point hike in July. However, even if the FOMC isn’t ready for a 100 basis point hike, it may want to make some more big moves on rates in the remainder of the year.”
Source: Fx Street
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