Strategy Video: FOMC Scenario Analysis for Dollar and Equity Markets
• At 18:00 GMT, the FOMC will announce its policy decision as well as release its statement and forecasts
• In contrast to previous meetings this year, there is material speculation that tightening will start now
• Whether or not the group hikes is the first concern; from there, other factors will shape market response
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Will the Federal Reserve finally take the leap to tighten monetary policy after months of warning? The market consensus for the conclusion of the FOMC's two-day meeting is a hold on rates near the zero bound as inflation languishes, the markets threaten another fit and data disappoints. However, there is a strong, hawkish counterargument to be made for long-term financial stability. The decision to hold or hike rates is only the the first stop in this event - though it is certainly the most important. We will also take in the policy statement, updated forecasts and Chair Janet Yellen's testimony. What are the different outcomes for this event and how will it set up trade opportunities? We discuss that in today's Strategy Video.
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