The Federal Open Market Committee (FOMC) meeting of the US Central Bank began on Tuesday, and the Federal Reserve (Fed) is expected to raise interest rates by 50 basis points. After the two-day meeting, which ends on Wednesday, Fed Chairman Jerome Powell will give a monetary policy speech, followed by a press conference. After the meeting, the Fed is expected to announce its policy rate, as well as make recommendations on inflation, GDP and unemployment figures.
Expectations for the Last FOMC Meeting of the Year
While investors are coming to the middle of a week full of catalysts that can greatly mobilize stock prices, Bitcoin (BTC) and altcoins, eyes are turned to the last FOMC meeting of the year.
November October November CPI data showed that inflation in the United States continued to slow down as in October, while the reading of the CPI data for November was positive, Bitcoin rose above 18 thousand dollars, many of the altcoins rose by double digits, the monthly and annual inflation in the United States announced yesterday came in 0.1 percent and 7.1 percent, respectively, and fell below expectations.
November December CPI data was released in the US, after the announcement of the Fed’s eyes turned to the December FOMC meeting, which will start on Tuesday and end on Wednesday with a press conference and Fed Chairman Jerome Powell announcing the interest rate decision. The market is currently expecting the Fed to go for a 50 basis point rate hike, compared to the previous 75 basis point rate hike.
According to CME’s FedWatch Tool, the probability of a 50 basis point rate hike decision coming out of the last FOMC meeting of the year is 79.4 percent, and the probability of a 75 basis point rate hike decision coming out is 20.6 percent.
While market experts expect the Fed to make a rate decision in line with expectations, the decisive factor on the markets will be Powell’s statements.
It Will Be the Fed’s 5th Interest Rate Hike
The Fed had gone to a 75 basis point rate hike on December 2 to keep the federal funding rate in the target range of 3.75 to 4 percent. This increase was the fourth interest rate hike made by the Fed in a row, and with the increases made so far in 2022, the federal funding rate has increased to 375 basis points.
If the Fed raises rates by 50 basis points today, the federal funding rate in the United States will have increased to a December range of 4.25 to 4.5 percent.