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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The expectation of the Federal Reserve's interest rate cut has increased, and the market response depends on multiple factors." Hope it will be helpful to you! The original content is as follows:
XM Foreign Exchange APP News-On Wednesday (September 17), the Federal Reserve held a meeting today and will announce the interest rate resolution at 18:00 GMT (02:00 Beijing time on Thursday). Powell will speak 30 minutes later. The market generally expects a 25 basis point rate cut, but details are crucial to the market, especially the dot chart; Powell is expected to continue the Jackson Hall meeting argument, with all eyes focused on possible signals about October; if dove signals are released, the dollar may be under pressure; the stock market is worried about pessimistic economic remarks. The countdown to the Federal Reserve meeting is about to end. The long wait has finally ended. The most critical Fed meeting in 2025 will be held today, and the interest rate resolution is scheduled to be announced at 18:00 GMT. The market overwhelmingly expects a 25 basis point rate cut, with the focus on the SEP (Economic Forecast Summary) report and its dot chart. Federal Reserve Chairman Powell will also host a press conference at 18:30 GMT as usual. Some might think that there may be no need to cut interest rates at this stage when inflation remains high and the labor market is just beginning to show some signs of weakness. However, after the release of employment data in early August, Powell's speech at the Jackson Hall Economics Seminar clearly demonstrated the Fed's intention to restart the easing cycle, and the data in early September further consolidated that view. If the discussion only revolves around the economic outlook and the Fed's dual mission, today's meeting may be simpler and more direct. But now that Trump is the president of the United States, the situation is much more www.qgrse.cnplicated. Its attempt to seize power, Miran's appointment and attempt to remove Lisa Cook from the Fed could lead toThe atmosphere of the meeting today was tense. Although participants are subject to strict confidentiality rules, members of the Federal Open Market www.qgrse.cnmittee (FOMC) may find it difficult to express their opinions freely. The market response may have huge differences. The benchmark scenarios for today's meeting are: (1) a 25 basis point cut; (2) Powell sent a moderate dovish signal at the press conference, leaving room for further easing; (3) The vast majority of members support a 25 basis point cut, and up to 3 opponents advocate a 50 basis point cut; (4) lower economic growth expectations. As the market has largely digested this scenario, if the meeting results meet expectations, the market response may be relatively limited. Nevertheless, even if the Fed cut interest rates by 25 basis points as expected and meets the above expectations, other factors may still affect market trends. If the dot plot shows that interest rate cuts will be twice in the remaining 2025, and similar strategies will be continued in 2026, and/or Powell releases dovish arguments, it may weaken the US dollar and boost risky assets. Given that the possibility of keeping current interest rates unchanged is almost zero, the biggest risk is that while cutting interest rates by 25 basis points, the hawkishness at the press conference exceeded expectations. If Powell avoids sending clear signals about the October rate cut, suppressing market expectations for continuous rate cuts, the stock market may suffer a setback, and the US dollar is expected to gain considerable buying. Meanwhile, it seems unlikely to cut interest rates by 50 basis points today. Such moves could mean that the Federal Open Market www.qgrse.cnmittee is extremely concerned about the economic outlook and may be seen as the result of Trump's political pressure. In this scenario, gold is expected to benefit, while the U.S. dollar and U.S. stock markets may suffer a major blow. The Bank of Canada will set the tone for the Federal Reserve Meeting. Before the key Fed meeting is held, the Bank of Canada (BoC) will hold its sixth meeting in 2025. Recently, Canada's economic data has taken a sharp turn for the worse, the labor market has loosened, and economic growth in the second quarter of 2025 is weak. Despite mixed inflation signals, the market expects the Bank of Canada to implement its second 25 basis point rate cut this year and expects another 25 basis points cut in December. Some people may think that the Bank of Canada is forced to follow the pace of the Federal Reserve to avoid
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