The results of the US FOMC meeting will be announced today. The economist’s forecast in advance is that a rate hike of 0.50 percentage points is likely. However, in the money market, a larger 0.75 percentage point rate hike has been factored in by 96%. There is also a view that the rate will be raised by only 1.0 percentage points. With the market leaning towards hawks, we are in the process of welcoming today’s announcement.
The focus will be on the pace of rate hikes in the future, along with today’s rate hikes. Interest rate forecasts by FOMC members will be announced. It will also be interesting to see how much the money market’s hawkishness is perceived at the FRB Chairman Powell’s press conference.
How is the market reaction? Of course, it depends on the result, but since a 0.75% rate hike is factored in, it seems that the dollar selling reaction will occur in the 0.50% range. However, the stock market will be positive. The dollar-yen pair is likely to move up and down violently.
In the case of a 0.75% rate hike, there seems to be no extreme reaction because it has already been factored in, but there seems to be an initial move to buy dollars due to a significant rate hike. The odds of a 1.0% rate hike are extremely low, but in this case the dollar will skyrocket and stocks will plummet and confuse. The noteworthy announcement time is scheduled for 3:00 am on the 16th of Japan time.
Currently, it is reported that the ECB will hold an extraordinary meeting today regarding the recent decline in bond prices (rising yields). The initial move to buy the euro has been seen. The situation is such that we cannot take our eyes off the euro market.
At the FOMC, inflation is accelerating as a 0.75% rate hike is factored in at once, but it’s a delicate matter whether or not to raise the rate by 0.75% tonight. If it is 0.5%, it is disappointing, so it is assumed that there is a possibility that it will move significantly up and down.
The ECB is also intensifying with the news that it will hold an extraordinary meeting. Also pay attention to this.
