The results of the US FOMC meeting will be announced today. Along with the extent of the rate hike, the economic outlook and interest rate outlook will be announced, and Fed Chairman Jerome Powell’s conference will be held. Amidst the urgent need to deal with inflation, financial instability problems have arisen in the United States and Europe, and the situation is extremely chaotic.
The market has already factored in a 25bp rate hike. A series of strong U.S. economic statistics released in February temporarily strengthened expectations for a 50bp rate hike, but the subsequent stabilization of indicators, the bankruptcy of Silicon Valley Bank, and the occurrence of financial instability threw the market into turmoil. . There was also a scene where the number of fixed observations increased considerably. However, due to the quick policy response along with the Credit Suisse problem in Europe, the crisis has subsided for the time being.
A key point is likely to be changes in the future economic outlook, especially the inflation outlook. The rate of increase in headlines such as the CPI has clearly slowed down. On the other hand, persistent inflationary pressure is observed in wage trends and core inflation. In terms of inflation, it seems that the BOJ cannot afford to slow down on raising interest rates. However, the market sentiment has just turned dovish due to the financial instability problem, and the market is likely to become unstable if it only emphasizes a hawkish stance. Powell’s remarks at the press conference are unlikely to be as hawkish as they were last time, but what will happen?
A nervous development in front of the FOMC today. Pay attention to the movement after the FOMC.
The Credit Suisse problem settled for the time being with the acquisition announcement, and CHF did not move as expected.
CHFJPY has stopped out and is currently no position.