Economists at TD Securities discuss the Federal Reserve Interest Rate Decision and its implications for the Bloomberg Dollar Spot Index.
More hawkish (20%)
Fed delivers a pause while also strongly hinting at the possibility of an additional rate increase before year-end. Chair Jerome Powell emphasizes the strong rebound in output in Q3, while also downplaying the upcoming shocks to the economy in Q4, judging them as temporary. BDXY +0.20%.
Base case (70%)
Fed delivers another hawkish pause after staying on hold in September, with the Committee leaving the door open for an additional rate increase. That said, the FOMC will repeat that it aims to ‘proceed carefully’ as it formulates the next steps for policy, also highlighting its increased data dependence. We expect Chair Powell to underscore that while macro data since the Sep meeting has turned out unambiguously firm, the Fed can afford to be patient as it gathers more data. BDXY +0.10%.
Dovish (10%)
Fed pauses but signals less need for further rate hikes given the recent tightening of financial conditions (and downplays the Sep dot plot). Powell mentions that the best course is to be patient given the totality of policy tightening still in the pipeline, the ongoing reduction of credit supply, and the upcoming shocks that will dent output in Q4. BDXY -0.50%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0900 after US data
EUR/USD stays in negative territory below 1.0900 in the American session on Thursday. The US Department of Labor reported that there were 222,000 first-time application for unemployment benefits last week, limiting the USD's recovery and helping EUR/USD limit its losses.
GBP/USD corrects lower toward 1.2650 on modest USD recovery
After touching its highest level in over a month at 1.2700, GBP/USD reversed its direction and declined toward 1.2650 on Thursday. The modest USD rebound seen following Wednesday's sharp decline makes it difficult for the pair to regain its traction.
Gold finds resistance near $2,400, retreats toward $2,380
Gold advanced toward $2,400 on Wednesday as US Treasury bond yields pushed lower following the April inflation data. The recovery in US yields combined with the US Dollar's resilience, however, causes XAU/USD to retreat toward $2,380 on Thursday.
Bitcoin likely to return to all-time high of $73,949, QCP Capital says
Bitcoin (BTC) price is likely to rally back to $74,000 in the coming weeks, it's all-time high reached in March, riding on three bullish catalysts, according to crypto trading firm QCP Capital.
Dow Jones Industrial Average soars 350 points, sets new all-time high as rate cut hopes surge
The Dow Jones Industrial Average clipped into a fresh all-time high on Wednesday, gaining almost nine-tenths of a percent during the US market session after US Consumer Price Index inflation slipped further back.