{"id":61675,"date":"2023-05-03T11:31:35","date_gmt":"2023-05-03T08:31:35","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=61675"},"modified":"2025-10-13T16:14:50","modified_gmt":"2025-10-13T13:14:50","slug":"feds-interest-rate-decision-in-the-spotlight-2","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/fr\/feds-interest-rate-decision-in-the-spotlight-2\/","title":{"rendered":"Fed\u2019s interest rate decision in the spotlight"},"content":{"rendered":"

The USD tended to weaken against its counterparts yesterday, as the Fed\u2019s meeting kicked off. The bank is to release its interest rate decision today and is expected to hike rates by 25 basis points raising them to the 5.00%-5.25% range. Characteristically Fed Fund Futures (FFF) tend to imply that currently, an 86.9% probability exists for such a scenario to materialize with the rest implying that the bank could remain on hold. Also please note that FFF tends to imply that the bank is to pause its rate hiking path after today\u2019s meeting and may proceed with rate cuts from September onwards. For the time being, we expect the bank to hike rates as mentioned and if actually so, we may see market attention turning towards the accompanying statement. Should the bank maintain a hawkish tone implying that more hikes are possible and that it\u2019s to maintain its tight monetary policy settings in place for a prolonged period of time, we may see the USD getting some support as market expectations for possible rate cuts within the year may be contradicted. On the other hand, should the accompanying statement actually be characterised by cautiousness and hesitation we may see the USD slipping as the market\u2019s expectations for a pause in the Fed\u2019s rate hiking path may solidify. Overall, we also note that gold\u2019s price tended to maintain its negative correlation with the USD, yet its rise yesterday may have gotten a bit out of proportion as it broke the $2000 per ounce psychological threshold while on the flip side, US\u00a0 stock markets tended to drop expressing market expectations for a possible hawkish tone in the Fed\u2019s decision. It should be noted that earnings reports of high-profile companies are also out, yet attention is expected to be mostly on the Fed\u2019s intentions. Please note that oil prices dropped yesterday, with WTI dropping below $72 per barrel, despite API reporting another substantial drop of US oil reserves. Market worries for the possible adverse effects of another rate hike by the Fed on economic activity and consequently on oil demand levels, tended to spur oil bears. Overall we may see increased volatility erupting upon the release of the Fed\u2019s interest rate decision, hence caution is advisable whilst trading at that time. Please note that volatility may be extended beyond the time of the release as Fed Chairman Powell is to deliver a press conference about half an hour later. \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

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