Fed Chair Jerome Powell’s comments on the Jackson Hole Symposium resulted in the worst weekly candle in US500 since June.
Will Fed Raise Interest rate?
What will happen?
On March 16, 2022, the US Federal Open Market Committee (FOMC) will make a statement and economic projections and, after that, the Federal Reserve will publish the Federal Funds Rate. This data comes out 8 times a year. An interest rate decision itself is usually priced in by the market in advance, so a forward-focused FOMC statement tends to outshine the rate announcement, especially if there’s no surprise in the rate.
How will it affect the dollar?
This release is the primary tool the FOMC uses to communicate with investors on monetary policy issues. Decisions made on this day add volatility to the market. In addition, press conference questions often lead to unplanned responses and increase volatility even more.
After the last release, USD rocketed by 560 points and then kept rising for some time.
How to trade on the Fed Funds rate release?
If the “Actual” rate is higher than expected, it is good for the currency. However, don’t underestimate the FOMC statement and press conference questions, which often lead to unplanned responses. The conference can trigger an opposite reaction in USD.
- If the release is hawkish – the USD will go up.
- Otherwise, it will fall.
Check the Economic calendar
Instruments to trade: EURUSD, USDCAD, USDCHF, US500, US100.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
The United States will publish the Inflation Rate and Core Inflation Rate, also known as US CPI and Core CPI, on August 10 at 15:30 GMT+3.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.