Financial institution of America analysts counsel the greenback might present little response even when the Federal Reserve hints at slowing the tempo of interest-rate cuts throughout its determination on Wednesday.
Whereas the market anticipates a 25-basis-point fee discount, the Fed may additionally point out a pause in January. Slower fee cuts would usually help the greenback, however this affect is perhaps tempered by the Fed’s concentrate on mitigating dangers of inflation reacceleration, addressing rising unemployment, and sustaining a restrictive coverage stance.
Moreover, a “buy-the-rumor, sell-the-fact” response may emerge, because the greenback has already strengthened on expectations of a cautious Fed strategy to fee cuts.
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I posted earlier on what shock could also be developing from the Federal Open Market Committee (FOMC) as we speak:
And:
FOMC assertion due at 2pm US Japanese time, with Powell talking a half hour later: