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Event of the week: FOMC meeting

Today we’ll be witnessing the long-awaited and highly anticipated FOMC meeting. Fed Chair Jerome Powell faces a precarious balancing act in managing dovish and hawkish pressures. As we say at moodix, he must “satisfy the dove with the hawk at his neck”. If you follow macro data closely, you can see a gradual decline in most major US indicators, a modest rise in inflation (not falling) and still solid labor market strength. A relatively unusual and complicated situation for the Fed.

It is very likely that we will get unchanged rates (a cut would be a huge surprise), leaving Jerome Powell with a Sophie’s Choice. Will he try to show the Fed’s hawkish resolve in fighting inflation or will we see an attempt to calm the markets and give the doves what they have been waiting for? We’ll find out all at 20:00 CET (2:00 PM EST) – interest rate rates decision and subsequent press conference at 20:30 CET (2:00 PM EST).

Good luck!

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