Investors are keenly awaiting tonight’s FOMC statement and Jerome Powell’s speech. Around 76% of investors is predicting a 0.25% rate cut, while the remaining 24% is betting on an even dovish Fed, with a 0.50% rate cut.
In other words, markets have already discounted a 0.25% rate cut and only the second scenario would be a surprise. I think this is quite unlikely, as the Fed is usually moving when the consensus is close or above 60%. Moreover, a 0.50% rate cut while the economy is still growing will put the Fed in a more complicated scenario in case the economy falls into a recession in the next few months.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
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© 2019 High Leverage FX - All Rights Reserved.