As expected, the Fed does not change its policy and does not start tapering. In the statement, however, we have an indication that if progress continues, tapering should begin soon (this means an announcement probably in November or December).
However, the Fed changes its macro forecasts! Here we already have a chance for a raise in 2022!
The median for the increases moves to 2022 and points to one increase. We have 10 members who are in favor of a rate hike and 10 members are in favor of keeping rates at the current level. Some, of course, want more than one raise. Inflation projections strongly increased for the current year, but barely changed for the following years. Lower economic growth for the current year and clearly increased for the next year. Source: Fed
Here we have a 50:50 split for the rate hike and for maintaining the current policy next year. Big changes also in 2023! 4 increases are expected by 2023. Only one person sees no change. We also have the first forecasts for 2024. Here, the median is 1.8%. Long-term median unchanged at 2.5%. Source: Fed
Interesting dollar reaction. The dollar is losing despite expectations of a rate hike already next year. However, the market may have been looking for tapering, and the Fed does not see the problem with inflation and for now wants to wait for further progress in the economy. Currently, a key resistance in the form of a downtrend line is being tested. Source: xStation5
This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.