USD and GBP Traders Await Big Moves

FOMC Interest Rate Decision

The Federal Reserve will update on interest rates and monetary policy on Wednesday, November 2, at 21:00 GMT+3. As usual, the release of the FOMC Statement and the Federal Funds Rate will be followed by the Press Conference with Fed Chair Jerome Powell at 21:30 GMT+3.

The Federal Reserve publishes the FOMC Statement eight times a year. It contains FOMC members’ votes on interest rates, monetary policy measures, current economic conditions, and further prospects. The interest rate decision is usually priced into the market. Thus, traders track changes in the statement and try to predict the next steps by the Fed.

This is one of the most important events for the market right now. The Federal Reserve is in the midst of its fight against high inflation, which hit 8.2% compared to 8.3% in August but above market forecasts of 8.1%. Analysts expect the regulator to raise the interest rate by 75 basis points to 4% in the meeting. At the same time, traders will look at the signs of a slower pace of rate hikes in the following meetings as inflation gets lower. Some Fed speakers have already expressed cautiousness in their speeches.

Last time, the USD was highly volatile during the event. For example, EURUSD fell right after the update, then stabilized during the Fed Chair Press Conference, and finally dropped back to the daily lows.

Back