The Fed should therefore most likely leave its rates unchanged this evening, which does not mean that the tightening cycle is…
(Boursier.com) — The Fed should therefore very probably leave its rates unchanged this evening, which does not mean that the tightening cycle is really over and even less that the monetary “pivot” is imminent. The monetary statement from the American central bank is expected this evening at 8 p.m., before Jerome Powell’s traditional press conference at 8:30 p.m. The Fed should therefore undoubtedly (99% probability according to FedWatch) choose to leave its rates unchanged in a range going from 5.25 to 5.5% this evening, observing a pause after a phase of accelerated tightening with delayed economic effects . Regarding the next meeting, on October 31 and November 1, the probability is 71% according to FedWatch that rates will remain at the same level, compared to 29% ‘probability’ of a quarter-point rate increase. Operators will carefully follow the evening’s announcements, trying to determine whether the Fed is really done with its rate hikes or whether it intends to further tighten its policy to ensure that inflation is controlled. It will also be a question of knowing how long rates will remain at their high level…
Particular attention will be paid to the Fed’s ‘dot plot’, which presents US central bankers’ rate estimates in the form of a dot graph. The September dot plot would therefore leave open the possibility of a 25 bp tightening for the following meeting, but it remains to be seen in what proportions.
On the economic front this Wednesday, operators will also take note of the weekly report from the Department of Energy on domestic oil stocks.
Tomorrow Thursday, the day will be active, with weekly unemployment claims, the Philadelphia Fed’s manufacturing index, the current account balance, resales of existing homes and even the Conference Board’s leading indicators index.
Finally, on Friday, investors will follow the US composite flash PMI index for the month of September.
In Wall Street business news, FedEx (after stock market), specialist in parcel transport, and the agri-food giant General Mills (pre-session), announce their latest quarterly reports. Darden Restaurants Or FactSet Research reveal their accounts on Thursday.