Fed meeting: the Expert gave a forecast of developments

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Wednesday concludes a two-day fed policy meeting. The rate hike this time no one is waiting, citing signs of an economic slowdown and the recent political crisis, which, in fact, has not been resolved. But this does not mean that this year the regulator will not increase the cost of credit – as the stabilization of the economic Outlook and extinction uncertainties, the Bank might decide to take two more hikes later this year.
But back to the next meeting. First and foremost, investors will be interested in the rhetoric of the monetary authorities. So, the highlights:
– The fed may revise its economic growth forecasts towards a small reduction;
– it is possible changes in the text of the accompanying statement (for example, in the estimation of the growth rate may sound “solid” instead of “strong”);
– when describing economic activity, the Bank can highlight the impact of the recent shutdown, which, by the way, could resume in mid-February;
– if your policy statement, Powell is not going to cover the topic of early reduction programs balance at the press conference, he definitely will have to deal with this issue.
Comments on this topic may bring additional volatility and put pressure on the dollar, if the head of the Bank confirmed the intention to curtail the program early.
In General, based on the foregoing, it can be assumed that the bearish risks to the dollar from the upcoming meeting will prevail. But also don’t forget that tomorrow start two-day talks between the US and China, who can make adjustments to the dynamics of world markets as a whole.
Michael Mashchenko,
analyst social network for investors
eToro in Russia and the CIS