{"id":74562,"date":"2023-12-13T10:32:21","date_gmt":"2023-12-13T08:32:21","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=74562"},"modified":"2025-12-11T14:38:46","modified_gmt":"2025-12-11T12:38:46","slug":"the-feds-interest-rate-decision-in-focus","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/es\/the-feds-interest-rate-decision-in-focus\/","title":{"rendered":"The Fed\u2019s interest rate decision in focus"},"content":{"rendered":"

The USD tended to remain relatively unchanged against its counterparts yesterday and the market\u2019s focus tends to turn towards the release of the Fed\u2019s interest rate decision in the late American session today. The bank is widely expected to remain on hold keeping rates in the range of 5.25-5.50% and Fed Fund Futures (FFF) tend to imply a probability of 99% for such a scenario to materialise, rendering the interest rate part of the decision as an open and shut case for the markets. It should be noted that FFF also imply an expectation of the market for the bank to proceed with four rate cuts in the coming year, starting from May onwards. Attention is expected to shift towards the Fed\u2019s accompanying statement and Fed Chairman Powell later on. Given the tightness of the US employment market as reported in November\u2019s employment report and the persistent inflationary pressures as reported in November\u2019s CPI rates, we tend to see the risks as tilted towards the hawkish side and if so, could provide some support for the USD. On the flip side should the bank opt to maintain a more cautious tone allowing for an intensification of the market\u2019s expectations for extensive rate cuts, we may see the USD weakening. Thus we also highlight the release of the Fed\u2019s new dot-plot, which is to show the Fed policymaker\u2019s expectations about where rates are to land in the following year and 2025. Should the dot plot contradict the market sentiment and imply a slower pace in rate cuts than the market expects we may see some bullish tendencies for the USD and vice versa. Overall we expect the release to have ripple effects beyond the FX market and a hawkish Fed could have bearish tendencies on US equities markets as the decision may signal that tight financial conditions are to be maintained, beyond the market\u2019s expectations, which could weigh especially on highly leveraged companies. A possible strengthening of the USD could also weigh on gold\u2019s price, given the negative correlation of the two trading instruments and given that US bond yields may benefit from a possible hawkishness of the bank.    <\/p>\n\n\n\n

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