{"id":88936,"date":"2024-07-31T11:34:29","date_gmt":"2024-07-31T08:34:29","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=88936"},"modified":"2024-07-31T16:50:17","modified_gmt":"2024-07-31T13:50:17","slug":"fed-interest-rate-decision-due-today","status":"publish","type":"post","link":"https:\/\/www.smartchinaeducation.com\/es\/fed-interest-rate-decision-due-today\/","title":{"rendered":"Fed interest rate decision due today"},"content":{"rendered":"

The Fed\u2019s interest rate decision is set to occur later on today. Currently, the majority of market participants are anticipating the bank to remain on hold with FFF currently implying a 96% probability for such a scenario to materialize. As such our attention turns to the bank\u2019s accompanying statement and Fed Chair Powell\u2019s press conference. We would not be surprised to see a more cautionary Fed, in regards to the bank\u2019s document outlining the risks poised of keeping interest rates too high for too long. Yet, when considering that the unemployment rate in the US  remains at historically low levels, in combination with a resilient economy, as seen by the preliminary GDP rate for Q2 which came in at 2.8% which is significantly higher than the prior quarter\u2019s rate, we would not be surprised to see a comment  in the bank\u2019s accompanying statement  in regards to the risks of a premature rate cut outweigh the risks of keeping rates steady. In conclusion, we tend to agree with the majority of participants that the bank may remain on hold, but opt for the view that the bank may provide hints for rate cuts beginning further down the line such as in November rather than the current expectations of a cut in their September meeting. In turn, such a scenario could provide support for the greenback.The Eurozone\u2019s and France\u2019s preliminary HICP rates for July are due out in today\u2019s European session. Should the preliminary HICP rates imply persistent or even an acceleration in inflationary pressures in the bloc, it may increase pressure on the ECB to withhold from cutting interest rates any time soon. We would like to note that Germany\u2019s preliminary GDP rates for July which were released yesterday came in higher than expected and as a matter of fact, showcased an acceleration of inflationary pressures in one of the bloc\u2019s largest economies. We are concerned that if inflationary pressures in the zone fail to decrease, the ECB may push back against the market\u2019s current expectations of two more rate cuts by the end of the year which in turn could aid the EUR. Earlier on today, the BOJ hiked interest rates by 15bp, which was just above expectations of 10bp. Yet what piqued our interest was the banks accompanying statement in which it was stated that \u201cthe Bank will accordingly continue to raise the policy interest rate\u201d implying that the BOJ may be preparing to hike rates in the future.<\/p>\n\n\n\n

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