{"id":41485,"date":"2023-01-31T15:44:00","date_gmt":"2023-01-31T15:44:00","guid":{"rendered":"https:\/\/youtrading.com\/en\/?p=41485"},"modified":"2023-02-02T23:50:30","modified_gmt":"2023-02-02T23:50:30","slug":"market-insight-fomc-preview-2","status":"publish","type":"post","link":"https:\/\/youtrading.com\/en\/market-insight-fomc-preview-2\/","title":{"rendered":"Market Insight – FOMC Preview"},"content":{"rendered":"\t\t
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The Fed will begin its two-day meeting later today and announce its rate decision at 19:00 UTC on Wednesday. Fed Chair Jerome Powell’s press conference will follow the rate decision at 19:30 UTC.<\/p>

Fed Officials also have signalled their intention to lift the rate above 5% in 2023 and keep it there throughout the year. Having raised rates by 425 basis points (bps) last year.<\/p>

The has also included outsized moves of 75 basis and 50 basis, and expectations are firmly centred on the Fed to slow the pace of tightening to 25 bps on Wednesday.<\/p>

The Federal Reserve raised the fed funds rate by 50 basis point to 4.25%-4.5% during its last monetary policy meeting of 2022, pushing borrowing costs to the highest level since 2007, and in line with market expectations.<\/p>

Having raised rates by 425 basis points last year that included outsized, expectations are firmly centred on the Fed to slow the pace of tightening to 25 basis point.<\/p>

In other words, a 25-basis point rate hike is priced in. The focus will be on whether Powell acknowledges the recent\u00a0weakening in the economy and inflation, boosting markets’ hopes for an early pivot toward easing.<\/p>

The odds, however, are stacked against such an outcome, as the recent rally in stocks<\/a> and bonds<\/a> and the decline in the US dollar<\/a> and eased in terms of price pressure\u00a0in the economy for the first time since April.<\/p>

As markets know, this has dented the Fed’s effort to counter rampant price pressures in the economy with tighter credit standards. However, there is a strong possibility that in the press conference.<\/p>

Powell could be more hawkish and re-tighten financial conditions. For that reason, we could see a healthy short-term correction in all risk-on assets tomorrow.<\/p>

Markets could be forgetting Powell’s comments that \u201cPrice stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.\u201d<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The Fed will begin its two-day meeting later today and announce its rate decision at 19:00 UTC on Wednesday. Fed Chair Jerome Powell’s press conference will follow the rate decision at 19:30 UTC. Fed Officials also have signalled their intention to lift the rate above 5% in 2023 and keep it there throughout the year. […]<\/p>\n","protected":false},"author":4,"featured_media":41487,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[42,69,200,67],"yoast_head":"\nMarket Insight - FOMC Preview - Youtrading UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/youtrading.com\/en\/market-insight-fomc-preview-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market Insight - FOMC Preview Market Insight - FOMC Preview\" \/>\n<meta property=\"og:description\" content=\"The Fed will begin its two-day meeting later today and announce its rate decision at 19:00 UTC on Wednesday. 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