Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
Eurozone Recession Risks Rise as Middle East Conflict Threatens Growth, ECB Official Warns 
Kevin Warsh Advances Toward Fed Chair Role Amid Political Tensions 
South Korea Central Bank Signals Cautious Policy Amid Inflation and Middle East Tensions 
BOJ Rate Hike Expectations Grow as Board Member Signals Hawkish Stance 
RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Japan Inflation Expectations Rise as BOJ Rate Hike Timing Faces Uncertainty 
Paraguay Holds Interest Rate at 5.5% as Inflation Remains Stable Amid Global Uncertainty 
South Korea Central Bank Signals Inflation Concerns as Oil Prices Surge 
The U.S. Federal Reserve is in a hawkish mode. Since December 2015, the U.S. Federal Reserve has hiked rates seven times. It has hiked rates twice this year in unanimous voting and forecasted two more hikes over the remaining three meetings of the year.
FOMC will announce its September monetary policy decision today at 18:00 GMT.
The focus will be on the followings –
- Policy decision –Most of the analysts and economists expect the Fed to increase interest rates by 25 basis points. The market is pricing a 100 percent chance of a rate hike. So naturally, a rate hike alone would not be very bullish for the dollar. However, since the market and especially EM economies are worried about dollar liquidity, it might be bullish.
- FED’s monetary policy statement – The market would be looking for a clue to future rate hikes by assessing the tone of the statement.
- Fed projections - This is likely to be the most vital piece of document. The focus will be on participants’ projections of future rate hikes, as well as inflation, GDP, and unemployment rate. A faster growth forecast and higher inflation forecast will be positive for the dollar.
- For the interest rate projections, the focus will be on next year to see whether the Fed upgrades its projections from the current two rate hikes in 2019.
- Press Conference: Jerome Powell’s press conference is scheduled at 18:30 GMT.
The financial market is pretty convinced that the U.S. Federal Reserve would increase rates for the eighth time since 2015 and for the third time in 2018. The market is currently pricing a hike in December with 84 percent probability and confident of two more hikes in 2019.
The dollar index is currently trading at 94.32, up 0.2 percent for the day, so far. S&P500 is almost flat for the day, trading at 2916 area.
