Federal Reserve Rate Decision Preview (SEP 2024)
Federal Open Market Committee (FOMC) Interest Rate Decision
The Federal Reserve stuck to its restrictive policy in July, with the central bank keeping US interest rates within its current threshold of 5.25% to 5.50%.
US Economic Calendar – July 31, 2024
It seems as though the Federal Open Market Committee (FOMC) is in no rush to alter the course for US monetary policy as Chairman Jerome Powell and Co. ‘do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent.’
In turn, the FOMC may continue to combat inflation as the committee pledges to ‘make our decisions meeting by meeting,’ with the central bank going onto say that ‘monetary policy will adjust in order to best promote our maximum-employment and price-stability goals.’
Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here
EUR/USD Chart – 15 Minute
Chart Prepared by David Song, Strategist; EUR/USD on TradingView
EUR/USD dipped to a session low of 1.0802 following the announcement but the exchange rate pushed higher during the press conference with Chairman Powell to close the day at 1.0826. EUR/USD struggled to retain the advance following the Fed rate decision as it slipped to a fresh weekly low (1.0778) the next day, but the weakness was short-lived as the exchange rate closed the week at 1.0910.
Looking ahead, the FOMC is expected to reduce US interest rates by 25bp rate in September, and central bank may also adjust its forward guidance as the central bank is slated to update the Summary of Economic Projections (SEP).
With that said, fresh developments coming out of the Fed may drag on the US Dollar should the central bank prepare US households and businesses for a rate-cutting cycle, but more of the same from Chairman Powell and Co. may generate a bullish reaction in the Greenback as the dot-plot from the June meeting showed that ‘the appropriate level of the federal funds rate will be 5.1 percent at the end of this year.’
Additional Market Outlooks
US Dollar Forecast: USD/JPY Clears December Low with Fed on Tap
GBP/USD Bull-Flag Starts to Unfold ahead of Fed and BoE Rate Decision
Gold Price Breakout Pushes RSI Toward Overbought Zone
US Dollar Forecast: USD/CAD Pushes Above September Opening Range
--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024