Sunday , April 11 2021

The Federal Reserve gives a decision to wait for the financial world



Today's decision is in line with the expectations of economists and markets. Remember: the market values ​​the possibility of keeping the STP unchanged at more than 90 percent. The FOMC decision is one-headed.

The last interest rate increase occurred after the September 26 2018 meeting.

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Today in the afternoon we inform: The Fed will win the dollar today?

The dollar, yesterday afternoon, will defeat the loss that occurred after the publication of the results of the general election to Congress, which indicated the Democratic victory in the House of Representatives. Sessions in Asia confirmed this trend, and the American currency also increased in the first hour of the European session.

  • "Every time we do what's extraordinary, he raises interest rates" – so Jerome Powella sums up Donald Trump, adding that even though he doesn't explicitly make decisions about his appointment, but maybe … maybe he will. more "

EUROSTREFA: According to the European Commission, economic growth in the euro zone this year will reach 2.1 percent, in the future 1.9 percent, and by 2020 it will be 1.7 percent. In the case of Woch, the European Commission saw this year an increase of 1.1 percent, in the case of 1.2 percent, and 1.3 percent. in 2020, which is a revision of the previous forecast line.

Brussels officials see this risk in the form of a rising budget deficit, which this year is only 1.9%. GDP, in the future and 2.9 percent. GDP, and in 2020 will break the barrier of 3.0%. GDP and reached 3.1%. GDP. – That's more than expected by government candles. Woch's debt is expected to remain close to 131 percent. GDP for the following years until 2020.

opinion: The yield on the US government's 10-year bond (3.22%) was slightly withdrawn, with Wall Street continuing to grow. Investors in Europe, however, are bolder – the German DAX is slightly weaker and as a result it is not possible to test the November 2 Summit at 11,681 points.

The market, therefore, quickly "digested" the electoral problem for Congress back to old subjects. The Fed meeting, which must confirm a "positive" view from decision makers about the prospect of further interest rate increases, might be support for the US currency today.

On the other hand, the euro issue is still uncertain about developments in the Italian subject (from the European Commission, indicating that it might initiate procedures against Rome if it does not change the draft budget next year on November 13). According to mediw yesterday, the head of the same ECB, Mario Draghi, pushed Wochnia.

As for the pound, there is increasing pressure for the government to immediately adopt a law on brexit, although the scenario for Irish backstop is not dominance and is still a line of ministerial division in the government of the British prime minister. He himself, according to medial speculation, wants to first ensure that his project will be supported by the main European Union leaders, before he wants to "impose" his acceptance in his own government, which may take place on Saturday.

Therefore, our week may be important in this topic. If he believes in speculation from the last days, Britain will want to adopt the Brexit bill on November 19-21, so they can be presented at the EU-United Kingdom Summit on November 27-28.

It's just for now, what seems to have stopped at the site, which might be a pretext for a correction in the pound's growth in recent days. Open theme remains US-China trade relations.

However, the market is not focused on today's data on China's trade balance, and is awaiting rumors related to a sketch of a new trade agreement, which is being prepared by the Trump administration, which will be presented to Chiczskis this month. There is a risk that it will not be well received by other parties and as a result, trade conflicts can increase (Biay Dom mgby in this situation will bring others to other products imported from China). Currently investors are hoping, but may turn around.

On the daily view of EUR / USD, it can be seen that the attempt to get out of the canal of growth is unsuccessful and we make (as now) a return movement. If today the rally closes in the area of ​​1.1460 and above, then we can rely on a continuation of earnings. Closing in the area of ​​1.1420-60 and that will mean an increase in the possibility of returning to page 1.13 in the following week.

DM BO

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On October 20 we informed: Some bankers want further interest rate increases – Fed minutes

Some FOMC members consider it necessary to continue the interest rate increase in the long run – in accordance with the minutes of the last Federal Reserve meeting.

  • President Donald Trump said in a row in an interview for Fox Business television: "The Fed is my biggest threat" for raising interest rates too quickly. Trump is increasingly attacking the policies of the US central bank, Reuters wrote. more "

A phased approach to increasing interest rates compares the risk that increases may be too fast or too slow – the Fed believes.

"Some FOMC members expect monetary policy to be quite restrictive for how long, while some of them assess that there is a need to increase temporary interest rates above the preconceived estimates of increases in the long term to reduce the risk to exceed 2%. Inflation target and avoid imbalances significant financial, "minutes of the Fed minutes.

"Estimates regarding the neutral interest rate will be one of the many factors taken into account by the FOMC when deciding monetary policy," he added.

Bankers agreed on the decision regarding the increase in interest rates taken at the meeting.

"All bankers have expressed the view that the Committee should continue a phased approach to monetary policy union with a percentage increase of 25 bp at the meeting," said the report.

– Almost all FOMC members consider it appropriate to remove statements in the post after the Committee meeting that "monetary policy remains accommodative," the bankers said.

Discussions at the neutral percentage of the STP did not dominate the FOMC meeting.

"Estimates regarding the neutral interest rate will be one of the many factors taken into account by the FOMC when deciding monetary policy," he wrote.

According to the banker, one must pay close attention to the possible reversal of the yield curve of US Treasuries and high-risk loans as a potential factor that can lead to a recession.

"Some bankers pay attention to the interest rate structure and the potential reversal of the bond yield curve can project into the economic outlook, because inversion in the past usually precedes the beginning of the recession in the US," the report said.

"Some meeting participants indicated that one must remain vigilant about risks to financial stability such as a continuous increase in the number of loans that bear the risk (…) and increased activity in the non-banking sector" – added in "minutes".

The market reacted neutral to the minutes of the FOMC meeting – the dollar strengthened against the major currencies by 0.5%. to 95.53 points, and 10-year US bond yields increased by 1bp. up to 3.18%.

The American Federal Reserve raises its main interest rate by 25 bps at the boiling point. up to 2.0-2.25 percent. It is high school in cycles, starting in December 2015, and the third in 2018 will increase food funds.

The Fed removed the definition of monetary policy as "accommodative," but during the conference after the meeting, Fed Chair Jerome Powell said the Federal Reserve's monetary policy could still be described as "accommodative." Powell will judge later, the US economy is "strong", customs issues do not affect his condition.

In addition to removing the definition of monetary policy as accommodative, the Fed will not introduce any changes to the message. Fed bankers maintain their estimates for four increases in all 2018 and three more in 2019.

"The labor market is still strong, and activity in the economy is growing rapidly," estimates the Federal Reserve.

"In the past few months, the increase in average employment will be strong, and the unemployment rate will remain at a low level," he added.

US GDP in the second quarter of 2018 increased 4.2 percent. in the starless version (SAAR) kdk. This is the highest quarterly reading since 2014. The next Reserve Meeting will take place on November 7-8.

Starting in January 2019, a press conference will be held after the Fed meeting. So far, the press conference took place every second meeting of the Reserve. The frequency of macro projection publications will be maintained (quarterly).

Inflation, unemployment, GDP – see data from Poland and the world at Biznes INTERIA.PL


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