Markets Eye Fed's September 15-16 FOMC Meeting
As investors focus on the Fed's interest rate decision next week, macroeconomic data and remarks by Chair Kevin Warsh have reinforced expectations for a 25 basis point hike.
Global markets are focused on the Federal Open Market Committee meeting to be held by the US Federal Reserve on September 15-16. In line with the latest data released and messages from Fed Chair Kevin Warsh, the bank is expected to implement a 25 basis point interest rate hike on Wednesday.
Market Expectations for the FOMC Meeting
Markets continue to search for direction ahead of the Federal Reserve's Federal Open Market Committee meeting scheduled for September 15-16. A 25 basis point interest rate hike by the bank on Wednesday is heavily priced into the markets.
Factors Driving Interest Rate Hike Expectations
Messages delivered by Fed Chair Kevin Warsh at the Jackson Hole Economic Policy Symposium last month and macroeconomic data released recently are supporting expectations for a rate hike upwards.
Impact of Future Signals on Markets
In addition to the decision the bank will make next week, signals that may be given in the policy statement and the post-decision press conference are expected to be decisive for the future trajectory of the markets.
Rally in Stock and Equity Markets
With the focus turning to the Fed's decision next week, gains were observed in stock markets. On Friday, the S&P 500 Index and the Nasdaq 100 Index recorded an increase of 0.9 percent.
Inflation Data and Pricing Probabilities
Consumer price index data led investors to price in the probability of a Fed rate hike next week at approximately 90 percent. Two rate hikes are expected by the end of the year.