No change, no dot plot? Not a problem – markets will rock and roll on any hint the Federal Reserve gives on the next moves, as uncertainty about tariffs loom. Live coverage of the decision and Chair Jerome Powell's press conference.
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Fed set to highlight strong labor market, not-too-cool inflation, scare markets
The Federal Reserve (Fed) has two mandates – full employment and price stability. It is clear that America's labor market is on fire, with massive job gains, low unemployment and healthy wage gains.
What about inflation? Investors were relieved that price rises didn't exceed expectations last time, but it didn't fall either. How does the Fed see things? That is a key question.
According to bond markets, the Fed is set to cut interest rates twice this year, and it might already be in March – 30%. If Powell goes hawkish, that percentage could fall, resulting in a rise for the US Dollar, while Gold and Stocks would suffer.
In case he reaffirms the two rate cuts projected in the dot plot, the opposite market reaction is on the cards: Gold and Stocks up, US Dollar down.
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