Live Coverage: Fed´s Powell set to hold onto rates and calm messages, markets may have other plans

Yohay Elam FXStreet

Fed Chair Jerome Powell and his colleagues are set to leave interest rates unchanged amid "unusual uncertainty" about tariffs and their impact, potentially causing a stir in markets.

Follow live coverage here on Discord

Join FXStreet Premium to participate in the live coverage, get Gold alerts, access the analysts, and lots more.

Investors want hints of a cut in June

When will the Federal Reserve (Fed) cut interest rates? It is unlikely to happen in its May decision, but investors will follow each word in the bank's statement and every twist to the message from Fed Chair Jerome Powell. It may be insufficient to keep them calm.

The Fed and the markets do not know where President Donald Trump's tariff policy will end up. Negotiations with over a dozen countries are ongoing, and to some countries, it remains unclear what Washington wants. It is also unclear how duties will impact the economy: only push prices temporarily higher or have a lasting impact. Will growth only slow or is a recession looming?

The Fed would hike rates to curb inflation and cut them to lower unemployment, but it cannot make a call just yet. Fed Chair Powell will likely signal more data is needed before making a decision in June. Bond markets see roughly a 30% chance of a cut next month, and closing the door these hopes would boost the US Dollar. Conversely, indicating such a decision is on the cards would boost Stocks and Gold.

Live financial market coverage

FXStreet covers major economic releases in a live blog format, to provide readers an instant verdict of the data, rapid analysis of key assets, and for Premium members, the abilty to ask our experts questions in real time.

FXStreet Premium

FXStreet Premium provides subscribers access to analysts, exclusive actionable analysis, signals, Ed Ponsi's webinars, trade plans and a bullish/bearish indicator for Gold on critical events. Join FXStreet Premium here.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold clings to gains near weekly top, comfortably above $4,000 as US elections hit USD

Gold clings to strong intraday gains near the weekly high, trading comfortably above the $4,000 psychological mark during early European session amid a broadly weaker US Dollar. Democrats’ wins in the House and Senate raise the prospect of gridlock in Washington. Moreover, heightened political uncertainty drove investors to safe-haven assets, exerting downward pressure on US bond yields. This is seen weighing on the Greenback and supporting the precious metal.

Bitcoin tests critical support, Ethereum struggles below resistance, XRP extends losses

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure on Wednesday as bearish momentum continues to weigh on prices. BTC approaches key support around $76,466, and a decisive close below could open the door to deeper losses. Meanwhile, ETH struggles below key resistance while XRP faces rejection at the upper trendline of a falling channel pattern, all hinting at deeper losses.

ADP Employment Report expected to show slower job growth in October

The Automatic Data Processing Research Institute is due to release October’s private-sector employment report on Wednesday. The market consensus anticipates a moderate slowdown in job creation, with the ADP Employment Change expected to show 69K new private jobs in October, down from 90K in September.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.