There has been so much anxiety as Federal Open Market Committee (FOMC) set to hold its first meeting of the year, today February 1st. There are many anticipations and intrigues on how this meeting will affect NASDAQ, Dollar, International Stock and the Crypto market.
Experts have predict that the result of the first meeting will carve out the pattern which the stock and Crypto will following in the coming months.
The probability that the Fed will increase its key interest rate by 25 basis points on Wednesday is almost exactly 100%, bringing the policy rate to a range of 4.5%-4.75%.
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This month, Treasuries gained on broad expectations that the Federal Reserve is about to stop raising interest rates as inflation declines and the economy cools due to tighter financial conditions. Traders will learn if that’s likely the case next week when the central bank delivers its most recent decision and the monthly job-market data is made public.
Recall, the Federal Reserve held a meeting in December to talk about the results of many interest rate increases the government’s lending institution had implemented in recent months. The existing interest rate range was increased during the meeting from 4.25% to 4.5% by raising the interest rate by half a percentage point.
The Federal Open Market Committee’s (FOMC) minutes are typically released three weeks following the day the policy decision was made. Along with the vote split, investors also look for hints in this release about the policy prospects. A optimistic approach is more likely to strengthen the dollar than a dovish one, which is thought to be USD-defeating. It should be noted that the market response to the FOMC Minutes might be delayed since, unlike the FOMC’s Policy Statement, news outlets do not have access to the publishing before the release.
At the December 2022 Fed meeting, Fed Chair Jerome Powell was direct when he noted, “We still have some ways to go.” But how far is “some ways” exactly? Since then, a few FOMC members have adopted a more dovish tone as US inflation pressures have subsided. Along with a strong job market, widespread speculation about the timing of a “pause” or “pivot” has fueled gains in equities markets and a comeback in bonds.
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With phobia and uncertainty about the outcome the FOMC upcoming meeting, the Crypto market has gotten slight downfall ahead the meeting. The leading crypto currency with the largest market cap, Bitcoin (BTC) has dipped from 23,000 to the range of 22,500 – 22,700.
Key Points On What To Look On Today’s FOMC Meeting
FOMC Statement
FOMC statement also know Interest Rate Statement, Fed Statement, Monetary Policy Statement; If is more hawkish than anticipated, the US dollar, Stock and Crypto will benefit and might see pump.
According to Forex Calender, it is Scheduled 8 times per year. The next release is slated for Mar 22, 2023.
The main medium through which the FOMC engages investors in discussions regarding monetary policy is the Interest Rate Statement. It includes discussion about the economic circumstances that impacted their votes, as well as the results of their vote on interest rates and other policy initiatives. Most significantly, it covers the state of the economy and provides information on how future elections will turn out.
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Federal Funds Rate
The Federal Funds rate also called Interest Rates or Fed Funds Rate has a previous rate declared by FOMC as 4.5% and the forecast for todays meeting is expected to be 4.75%.
If the actual result is greater than ‘Forecast’ is good for the market.
Short-term interest rates are the most important determinant in currency value; traders use the majority of other indicators to forecast future changes in rates.
A total of eight regularly scheduled meetings and extra sessions as needed are held by the FOMC each year. The calendars below provide links to the minutes and policy statements. Three weeks after the day the policy decision was made, the minutes of regularly scheduled meetings are made public. At the first regularly scheduled meeting of the year, the committee’s membership is changed.