- March 22, 2023
- Posted by: Noureldeen Al Hammoury
All eyes are on the FOMC decision in a few hours, which is likely to have a major impact on the markets, depending on what the Federal Reserve decides to do. Estimates point to a possible 25bps rate hike, despite the recent banking crisis. The Federal Reserve’s credibility is on the line.
I believe that the Federal Reserve will go ahead with another 25bps, but it is likely to be a dovish hike. They are likely to hint at a pause in the coming meetings, and Jerome Powell will try to be as balanced as possible. This would be the best scenario for equities.
Earlier today, the UK core inflation unexpectedly rose to 6.2%, up from 5.8%, contrary to expectations of a decline to 5.7%. This is alarming for the Bank of England, which might be forced to intervene with a larger rate hike than 50bps, and the Federal Reserve will be watching.
Going back to the Fed today, the initial impact is not always right, unless the Federal Reserve decides to be straightforward and clear, which is unusual. Therefore, do not chase any move right after the decision.
For the time being, we are still holding EURUSD and NZDUSD longs. You can check the status of these trades from the Portfolio Tab.
Make sure to keep the Squawk Box tab open so you can listen and follow the news. We will also have a live streaming session that will start 30 minutes before the decision. You can join through the Squared Financial link. Click Here
Stay tuned for further updates and market insights as we closely monitor the FOMC decision and its potential effects on the financial markets. Remember to manage your risk exposure and make informed trading decisions. Good luck!