Fed Keeps Rate, Brace up for USD and Equity volatility
It is unlikely that the #Federal Reserve might alter rates anytime soon following its long-awaited December hike. This is not to say that the policy meeting will turn out to be a non-event. It is expected that the policy statement from the largest apex bank in the world is expected to fuel key, principal trends: mainly the #global view of risk leanings and the conflicting monetary policy amid the key players.
We expect #traders to look away from deviations to the target, and concentrate more towards “forward guidance” in the speech that follows all policy meetings.
Considering that the #FOMC has a target of 100bps or hikes this year alone and the market is extremely doubtful of such a pace, the focus will be on how the gap is being narrowed by the rhetoric – which the #FOMC hope to use as a pointer to show that their pronouncements can be swayed by #asset prices and can be isolated as a sign for worries as seen brewing in the global economy and China.
Fundamentally, at #Capital Street Research Desk we believe that the week actually starts today. With the rate decision from the FOMC being scheduled for release today, the expectations are vivid for both the US Dollar and the capital markets. At #CSFX Research Desk, we’ll keep you abreast with news about volatility and trend interpretation as things unfold.