Soft inflation in the U.S. and a robust world economic situation has go the Fed in a dilemma, it is to state on Wednesday which way it will go, whether it’ll hike interest rates once again in 2017 or put it on hold till prices start growing faster.
The main point of interest for markets in the near future will be the policy statement of the U.S. central bank with info on inflation, along with new predictions from those involved in policy-making. Plans and the policy statement are expected to be presented at 18:00 GMT, and Janet Yellen’s press conference will follow 90 minutes later.
It’s probable that the Federal Reserve is going to declare a planned decrease of its holdings of bonds and mortgage-backed securities worth $4.2 trillion, the bulk of which was amassed in view of crisis and recession of 2007-2009.
Markets forecast a scheme that is not going to have much effect in the beginning, it is supposed to restrict the number of maturing bonds used monthly in order to buy some new. $10 billion a month – that is the first lowering of reinvestment, it could start in October.
Economists, though, are more interested in forecasts by officials for the federal funds rate in the end of the year that could give clue to whether the much anticipated quarter-point increase will take place in December.