What to pay attention to in FOMC Statement?
There are two main issues traders should pay attention to in Fed statement. First of them is interest rate hike. We can expect that FOMC members will once again call for patience. Fed Chair Janet Yellen said in December that being “patient” meant the committee was unlikely to raise rates “for at least the next couple of meetings,” or not before late April.
Analysts are divided on timing of interest rate, with most of them nit anticipating rate hike before July. This leads to the second issue and that is falling inflation. In December, the FOMC said it “expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.” This is the tone we can expect today as well.
Until the statement we can expect that markets will be relatively quite. Euro is currently being traded around 1.1350 level, Sterling is slightly below 1.52 handle while Aussie is around 0.80 handle.
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