Japanese Yen Retreats as Dollar Rises Ahead of Fed, BOJ Rate Decisions 
Fed’s Hammack Says Bond Yield Surge Is Not Driven by Inflation Fears 
BOJ Set for 25-Basis-Point Rate Hike as Yen Weakness Fuels Inflation 
BOJ Flags Import Costs and Yen Shocks as Persistent Inflation Risks 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
ECB May Stop Rate Hikes After December, Capital Economics Says 
BlackRock’s Rick Rieder Favors Bonds Over Stocks as Treasury Yields Surge 
Global Central Banks Brace for More Rate Hikes as Inflation Risks Rise 
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Today, the U.S. Federal Reserve will announce its monetary policy decision at 19:00 GMT. Recently, the U.S. Federal Reserve chairman has directly hinted at a pause and the central bank signaled just two rate hikes for 2019. However, the central bank chief Jerome Powell also pointed to the fact that from now on, the central bank would be more dependent on incoming data than fixed forward guidance.
The U.S. Federal Reserve has hiked rates by 25 basis points four times last year.
The focus will be on the followings –
- Policy decision –Most of the analysts and economists expect the Fed to maintain the Federal Funds Rate unchanged at 2.25-2.50 bps. The market is pricing a 97 percent chance of no rate hike at today’s meeting.
- FED’s monetary policy statement – The market would be looking for a clue to future rate hikes by assessing the tone of the statement. In the absence of projection materials and with no press conference scheduled that market would be looking closely at the statement to assess the bias.
The financial market is pretty convinced that the U.S. Federal Reserve would not increase in the rate at today’s meeting. But, more importantly, the market is not even pricing just one hike. The only rate hike is currently priced in December and that with just 23 percent probability.
The dollar index is currently trading at 95.96, up 0.15 percent so far today.
