Help
FOMC decision day
Investors await the outcome of one of the most closely watched Federal Reserve meetings in years, with uncertainty over a 25 or 50 basis point cut fueling expectations of market volatility
FOMC meeting decision could trigger significant market volatility
Markets are divided between a 25 bps or 50 bps rate cut
UK inflation remained steady at 2.2% in August, matching market expectations
Markets brace for Fed's rate cut decision
The highly anticipated Federal Open Market Committee (FOMC) meeting has finally arrived, with the financial community anxiously awaiting the Federal Reserve's decision on interest rates. Market participants are split on whether the Fed will implement a 25 basis point (bps) rate cut or opt for a more aggressive 50 bps reduction. With uncertainty surrounding the outcome, the decision is expected to generate significant volatility across multiple asset classes.
Today's FOMC decision is shaping up to be one of the most closely watched in recent years. Futures markets currently indicate a 65% probability of a 50 bps cut, while 35% of market participants favor a more cautious 25 bps move. Despite the market's leanings, many economists expect the Fed to take a more measured approach. The outcome, however, is likely to highlight a division within the FOMC itself, as hawks and doves on the committee may engage in intense debate over the best course of action.
Beyond the size of the rate cut, today's meeting holds broader significance for understanding the Fed's future policy direction. Investors are eagerly awaiting updates on the central bank's rate path projections, revisions to the key “dot plot,” and the release of new economic forecasts. Together, these elements will provide a comprehensive picture of the Fed’s thinking and are likely to set the tone for markets in the coming months.
UK inflation holds steady at 2.2% in August
The annual inflation rate in the United Kingdom remained unchanged at 2.2% in August 2024, in line with July’s figures and market expectations. The largest upward pressure on inflation came from rising airfares, while falling prices for motor fuels, as well as restaurants and hotels, contributed to easing inflationary pressures. On a monthly basis, the Consumer Price Index (CPI) rose by 0.3% in August, following a 0.2% decline in July, also meeting market forecasts.
