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- Investors will be looking for answers to the question of how the Fed intends to reduce its balance of $4.5 trillion.
Investors will be looking for answers to the question of how the Fed intends to reduce its balance of $4.5 trillion.
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Loading...As the Fed begins its two-day meeting, traders and investors expect more information for how FED is considering shrinking its $4.5 trillion balance. The Fed's balance has reached this value thanks to its quantitative easing program. The Fed did so to help the economy recover after the recession and not later return to it.
The Fed is expected to raise interest rates by 0.25 basis points, but investors will turn their attention to Yelan's speech, from where information is expected on how members are considering lowering the balance. Market players are looking for details of the terms and conditions that the Fed should see to begin the process.
Besides balancing information, on Wednesday the Fed will most likely admit that inflation is still weak. At 15:30 we expect data on inflation and retail sales. If we see a sharp change in inflation in the downward direction, it's very likely that Janet Yellen will rethink his speech and soften the tone. Under worse economic data, the United States is also not offset by a sharp drop in the rate of interest rate pick-up that currently stands at 97.8%.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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