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What to Expect at the FOMC Meeting

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What to Expect at the FOMC Meeting


The Fed will meet today and tomorrow to determine what to do regarding monetary policy. It is widely believed that the FOMC would decide to increase rates by 75bps. This would bring the policy target to 4.0%. This would mark the highest rate since December 2007, when the Great Financial Crisis began, and it would also be the most significant increase in rates since then.

A week ago, almost 100% of economists agreed on the size of the rate hike. Some economists are now less confident due to new data. At one time, almost 20% of economists projected a rise of 50bps. This support helped to support some weakness of the dollar over recent sessions. The greenback could move a bit higher if Fed meets expectations.

What’s there to move the markets?

There are many reasons to believe that the Fed might decide to lower rates this time. It’s an unlikely scenario, and would take the markets by surprise. It could lead to a significant weakening of the dollar and support the stock market. Naturally, traders are more likely to predict this outcome than they are to actually see it.

Recent events have led some to speculate that the Fed could be getting close to slowing down the rate at which it is…



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