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


Today's decision was in line with the expectations of economists and the market. Remember, markets appreciate the chances of keeping stp unchanged at more than 90%. The decision of the FOMC is one-headed.

The latest increase in the interest rate occurred after the meeting on September 26, 2018.

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This afternoon we inform you: Will the Fed win the dollar today?

The dollar, yesterday afternoon, will defeat the losses suffered after the publication of the results of the congressional elections, which indicated the victory of the Democrat in the House of Representatives. The session in Asia confirms this trend, and the US currency also wins in the early hours of the European session.

  • "Whenever we do what is magnificent, it raises interest rates" – thus, Jerome Powella sums up Donald Trump, adding that although he did not explicitly make his decision about his appointment, but maybe … maybe he is. more "

EUROSTREFA: According to the European Commission, economic growth in the euro area this year will reach 2.1%, in the future 1.9%, and in 2020 it will be 1.7%. In the case of Woch, the EC sees this year an increase of 1.1% in the case of 1.2% and 1.3%. in 2020, which is a revision of the previous path of forecasts.

Brussels authorities see this risk in the form of a growing budget deficit, which this year is only 1.9%. GDP in the future and 2.9%. GDP, and in 2020 will break the barriers of 3.0%. GDP to reach 3.1%. GDP. – is more than expected by government wax. Woch's debt is expected to remain close to 131%. GDP for the coming years up to 2020.

opinion: The yield on 10-year US government bonds (3.22%) is slightly withdrawn, with Wall Street continuing to grow. Investors in Europe are, however, more adventurous – the German DAX is slightly retreating and as a result, it was not possible to test the Nov. 2 summit at 11,681 points.

Markets, therefore, to quickly "digest" the theme of the congressional elections returning to the old subjects. The Fed meeting, which should confirm the "positive" views of decision makers on the prospects of further interest rate hikes, could be a boon to the US currency today.

On the other hand, the euro issue is still unclear on developments in the subject of Italian (the European Commission, signs that it can initiate proceedings against Rome if it does not change the draft budget next year until November 13). According to the mediw of yesterday, the same head of the ECB, Mario Draghi, was pressing for Wochnia.

As for the pound, there is growing pressure for the government to quickly adopt a brexit law, although the scenario for Irish support is not domknity and is still the dividing line for ministers under the British prime minister. She herself, according to media speculation, wants to first make sure that her project will be supported by the top EU leaders before she wants to "force" her acceptance into her own government, which can take place on Saturday.

Our week can therefore be crucial in this topic. If he believes in last-day speculation, the British will want to adopt brexit laws between 19 and 21 November so that they can be presented at the special EU-UK summit on 27 and 28 November.

It's just that, for now, what seems to have stopped at the site, which may be an excuse to correct the growth of the pound in recent days. The open theme remains US-China trade relations.

However, the market is not focused on today's data on the Chinese trade balance and awaits rumors associated with the draft of a new trade agreement 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 the other party and as a result the trade dispute may increase further (Biay Dom, in this situation, will bring another to other products imported from China). At the moment investors are waiting, but can step away.

In the daily view of the EUR / USD, one can see that the attempt to break with the growth channels was not successful and we made (from now on) a return movement. If today rally close in the region of 1.1460 and above, then we can count on the continuation of income. Closing in the area of ​​1.1420-60 and this will mean an increase in the likelihood of returning to page 1.13 next week.


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On October 20, we reported: some bankers want more stp – minute increases from the Fed

Several FOMC members consider it necessary to continue interest rate increases over a long period – according to the minutes of the last Federal Reserve meeting.

  • President Donald Trump said in an interview with Fox Business: "The Fed is my biggest threat" because it's raising interest rates too fast. Trump is increasingly attacking the policies of the US central bank, writes Reuters. more "

The gradual approach to raising interest rates compares the risk that highs may be too fast or too slow – the Fed believes.

"The few FOMC members expect monetary policy to be moderately restrictive for how long, while several of them have assessed that there is a need to temporarily raise interest rates above long-term growth estimates to reduce the risk of exceeding 2%. inflation target and avoid significant financial imbalances, "the Fed wrote.

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

Bankers were unanimous about the decisions on increases in interest rates taken at the meeting.

"All bankers expressed the view that the Committee should continue its gradual approach to the unification of monetary policy by a 25 bps increase in the meeting," the report said.

– Almost all FOMC members considered it appropriate to remove the statement in office after the Committee's meeting that "monetary policy remains accommodative," the bankers said.

The discussion about the neutral level of percentage of stp does not dominate the FOMC meeting.

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

According to bankers, close attention should be paid to a possible reversal of the yield curve of US Treasury bonds and high-risk loans as potential factors that could lead to a recession.

"Several bankers pay attention to the structure of interest rate terms and the potential reversal of the bond yield curve could be projected to the economic outlook, since reversal in the past usually precedes the onset of the recession in the US," he wrote.

"Some attendees of the meeting pointed out that such risks should be kept vigilant for financial stability as the continued increase in the number of risky loans (…) as well as increased activity in the non-banking sector" – added in "minutes."

Markets respond in a neutral way to the minutes of the FOMC meeting – the dollar is strengthening against the basket of currencies by 0.5%. to 95.53 points, and US 10-year bond yields rose 1bp. up to 3.18%.

The US Federal Reserve raises the main interest rate by 25 bps at a boiling point. to 2.0-2.25 percent. It was a sma in the cycle, started in December 2015, and the third in 2018 will increase fed funds.

The Fed removed the monetary policy definition as "accommodative," but during the post-meeting conference, Fed Chairman Jerome Powell said that the Federal Reserve's monetary policy could still be described as "accommodative." Powell will then assess, the US economy is "strong", customs matters do not affect its condition.

In addition to removing the monetary policy definition as accommodative, the Fed will not introduce changes to the message. Fed bankers kept their projections to four highs in all 2018 and three more in 2019.

"The labor market is still strengthening and activity in the economy is growing at a rapid pace," estimates the Federal Reserve.

"In recent months, the average increase in jobs would be robust and the unemployment rate will remain at a low level," he added.

US GDP in the second quarter of 2018 increased by 4.2 percent. in the unclassified version (SAAR) kdk. This is the largest quarterly reading since 2014. The next meeting of the Reserve will take place from November 7 to 8.

Beginning in January 2019, a press conference will be held after each Fed meeting. So far, press conferences have been held every second meeting of the Fed. The frequency of publication of the macro projection will be maintained (quarterly).

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


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