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FOMC: Should The Federal Reserve Be Wary Of Moving To Quick?


The Federal Reserve Fomc minutes meeting is approaching!

All Eyes will be on tonight's announcements from the Federal reserve as previously the U.S central banks left rates unchanged in September. The committee previously signaled that they still intended to increase the rates by December from 1.25%, Despite a slow growth and timed outlook on Inflation. 

Furthermore, with some of the top economists from around the globe giving a 90% chance that the rate hike will occur in December, There is a mutual understanding with the rate hike is almost fully priced in and analysts suggest fresh optimism or events would need to occur for the Dollar to continue its overall strength. The Fed also announced that it would start rolling back its $4.5 trillion balance sheet in October which could cause a catalyst effect on growth.

Regarding the DXY, a recovery above 93.50 would add momentum, opening the doors for a potential test of the 94.00 handle that capped the upside in August and also last week. A consolidation on top would mean that the USD rally goes on. 

If the minutes are evaluated as “hawkish”, pointing toward another rate hike in December and more to come in 2018, the greenback could strengthen in the market, boosted by potential higher yields. If any form of delaying the process or negative comments are made form the FOMC, the market will look to act upon this and carry on this weeks recovery from our major counterpart pairs. 


Who Are the FOMC?

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.