That day has come, guys! The Fed will hold a meeting at 21:00 GMT+3. It can be a highly impactful event. The markets expect the bank to hint about the timing of tapering.
Powell: normalization of the Fed’s policy won’t hurt financial markets
The Federal Reserve System has made it clear to the financial markets that it’s on the verge of raising the benchmark interest rate step by step, and market participants are probably not surprised by the actions of the US key financial institution. That’s what the head of the Federal Reserve, Jerome Powell pointed out.
The statesman told that the normalization of the Fed's policy is taking place without devastating damage to the financial markets. Moreover, the expectations of traders as for the future policy of the US key bank seem to be in tune with the expectations of the bank’s management.
He added that the overall situation in the economy generally meets expectations, and the financial markets won’t be surprised by the bank’s moves.
The Fed lifted the rate up to six times since December 2015, and each time by 25 basis points. The last time it was increased in March this year - up to 1.5-1.75% per annum, and the management of the key US bank made it clear that they expect two more hikes in 2018.
The gradual soar in the rate helped to maintain the Fed's stimulating policy that backed the surge of employment as well as economic recovery in the United States, and also contributed to a gradual leap in inflation.
Powell is assured that developing countries will easily cope with the gradual normalization of monetary policy in America.
From his point of view In his view, the role of the American monetary policy as a factor affecting global financial conditions as well as capital flows is often overestimated. Moreover, crucial factors in this regard are also the rates of global economic surge and also prices for raw materials.
The Fed will do its best to avert destabilizing markets, bringing its strategy to market participants as transparently and clearly as possible, as Powell stressed.
A selloff in stocks stopped. S&P 500 has reversed up from the 100-day moving average. It should be the perfect time to buy the index.
The FOMC, a committee within the Federal Reserve, will hold an important meeting and press conference on September 22 at 21:00 MT time (GMT+3).
Germany, the leading economy in the Euro Zone, will reveal one of the key economic indicators – German Ifo Business Climate on September 24 at 11:00 MT time.
On Wednesday, September 22, Microsoft will be holding a product launch. The event starts at 18:00 GTM + 3.
The Bank of England will hold a meeting on Thursday at 14:00 MT time (GMT+3).