{"id":58301,"date":"2023-03-23T12:08:51","date_gmt":"2023-03-23T10:08:51","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=58301"},"modified":"2025-10-13T16:12:02","modified_gmt":"2025-10-13T13:12:02","slug":"fed-hikes-by-25-basis-points","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/nl\/fed-hikes-by-25-basis-points\/","title":{"rendered":"FED hikes by 25 basis points."},"content":{"rendered":"

FED Chair Powell yesterday evening announced that the bank would be raising interest rates by 25 basis points <\/a>as was anticipated. During his speech, FED Powel re-iterated similar remarks made by the ECB that \u201cThe U.S. banking system is sound and resilient\u201d to reassure markets for the US banking sector and that the bank will continue with its primary purpose of \u201cmaximum employment and inflation at the rate of 2 percent\u201d.  We note the change in the tone of Chair Powell\u2019s speech in comparison to the previous interest rate decision, as the statement yesterday seemed to sound dovish, given that the content seemed to signal that a pause of rate hikes nears, while at the same time the bank stressed once again its determination to curb inflationary pressures. Furthermore, during the Q&A session of his press conference, Chairman Powell also stated that the scenario of a \u201cno-hike\u201d was also considered during yesterday\u2019s meeting but given how recent SVB\u2019s collapse was, there was little time to measure its long-term impact in addition to conducting an internal review. Fed Chairman Powell also welcomed an independent review. It\u2019s also characteristic that Fed\u2019s policymakers do not expect the bank to raise rates for the year above 5.25% according to the new dot plot that implies that only one more rate hike could be expected. In addition, Treasury Secretary Yellen testified yesterday before the Senate in which she stated that there would not be blanked coverage of deposits, increasing uncertainty surrounding the banking industry. The highlight of the day though is expected to be the Bank of England\u2019s interest rate decision later today. The market expects the bank to hike rates by 25 basis points. GBP OIS imply a probability of 92% for such a scenario to materialize. It should be noted that the market\u2019s expectations were solidified by the release of UK\u2019s CPI rates for February which unexpectedly accelerated. Indicating that the UK despite having high-interest rates is still experiencing an increase in inflation as such we could see the BoE hike rates in today\u2019s meeting in order to further combat inflation, yet it remains to be seen how hawkish the forward guidance will be. Should the forward guidance be more hawkish than expected we may see the pound getting some support and vice versa. In UK\u2019s fundamentals we note that yesterday the Windsor protocol passed a vote in the House of Commons which was another positive for the sterling as paves the way for improved trading relationships with the EU and solidifies Rishi Sunak in power. In France yesterday President Macron held a televised press conference in which he further re-iterated the need for raising the retirement age despite mass protests and calls for him to fire his Prime Minister, which may allow for the political unrest to be maintained.<\/p>\n\n\n\n

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