Markets are waiting for the evening decision of the US Federal Reserve and the latest macroeconomic projections, which will be released at 20. Fed chairman Jerome Powell’s conference will begin at 20.30.
Forecast: Fed above rates by 75bp
Analysts predict that the US central bank will increase interest rates by 75 bp for the third time in a row. in order to fight high inflationand. 2 out of 96 economists surveyed by the Bloomberg agency even expect a 100 bp hike.
– Markets in Europe will keep the attitude of “wait and see” because the Fed statement will be publishedaboutimportant after the close of the session in the region – comments Joachim Klement, head of strategy at Liberum Capital, for PAP.
Currently, the market is pricing in that the US forward rate will reach 4.25-4.50 percent. early next year. Economists surveyed by Bloomberg before the September FOMC meeting do not expect the Fed to start a cycle of interest rate cuts before 2024.
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The scenario of a recession in the US is more and more likely, therefore raw materials may become cheaper
– Higher interest rates in the US will certainly have a greater impact on unemployment in United States. According to the new Fed forecast, the unemployment rate is close to 4.5%. – comments Brett Ryan, senior economist at Deutsche Bank. In his opinion, the Fed will promote the “soft landing” scenario, ie that it will manage to suppress inflation without major damage to the economy. However, rate hikes increase the risk of a US recession.
Meanwhile, crude oil has been aiming to include the first quarterly loss for over 2 years. Concerns about the global economic slowdown negatively affect the outlook for energy demand. The prices of other commodities may also behave in a similar way due to the increasing risk of recession.
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