My expectations from upcoming fed meeting
On February 1 (Wednesday), the Federal Reserve will announce the interest rate decision. The current market expectations are largely expected to raise interest rates by 25 basis points, and raise interest rates by 25 basis points again in March, bringing the final interest rate to 4.75%-5%. interval.
As recently as last week, Fed officials still expressed support for raising interest rates above 5% and not cutting rates until the end of 2023. As for whether what he said is true or not, just look at it. Originally, these statements are a tool for the Fed to adjust market expectations.
New economic forecasts and dot plots will only be released at the March meeting, making market sentiment highly sensitive to upcoming Fed statements, especially the tone of Fed Chairman Jerome Powell's press conference.
With the inflation data still above target, the Fed may not prematurely instill any hope of a turnaround in the market, but any stance emphasizing a greater reliance on data is likely to be viewed positively by the market. Recent economic data has supported a less aggressive stance by the Fed, but policymakers have so far not wavered.
The dollar has largely been in consolidation mode over the past week after falling nearly 12% from its September 2022 peak. The weakness so far suggests that it is time to wait and see, with the dollar taking a break at the 101.00 support level. With lower highs and lower lows, the overall downward bias remains.
The U.S. non-farm payrolls data for January will be released on February 3 (Friday). It is expected that next week’s non-farm payrolls report will show a further slowdown in the U.S. labor market, with 175,000 new jobs created in January, lower than in December last year. 223,000 of them.
That would mark the fourth straight quarter of decline in the unemployment rate, which is expected to climb back to 3.6% (from 3.5% previously) amid continued layoffs. The slowdown in labor demand is consistent with the Fed's goal of promoting more sustainable wage growth.
With the data released after the Fed meeting, market action is expected to depend largely on the views of U.S. policymakers.
Poor job growth and a higher-than-expected unemployment rate could bring recession fears back into focus if Fed officials stick to their hawkish tone.
Modify on 2023-01-30 15:52
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