FOMC Interest Rate Decision and FED Chair's Speech: What Awaits the Markets Today?

What Time Will the FOMC Interest Rate Decision Be Announced?

In addition to the interest rate, the wording in the statement and the messages delivered by the FED Chair will be decisive for the market direction.

• –FOMC Interest Rate Decision: 21:00 (TRT)
• –FED Chair Press Conference: 21:30 (TRT)

What Are Market Expectations?

The vast majority of economists expect the FED to keep its policy rate unchanged at its current level.

However, the main point of interest for investors will be the signals the FED provides for upcoming meetings rather than the rate decision itself. In particular, answers to the following questions will be closely watched:

• –Is there a possibility of an interest rate cut in the remainder of the year?
• –How will the FED evaluate inflation?
• –Will new messages be given regarding the labor market?
• –Have economic growth expectations changed?

If Hawkish Messages Emerge — If the FED emphasizes its determination to fight inflation and states that rates could remain high for an extended period:

• –Selling pressure on gold may emerge.
• –The US Dollar may gain strength.
• –Bond yields may rise.
• –Pressure may be seen in equity markets.

Which Currency Pairs Might Move in the Forex Market?

Following the FOMC decision, high volatility can be expected particularly in the following products:

• –EUR/USD
• –GBP/USD
• –USD/JPY
• –XAU/USD (Gold)
• –Silver (XAG/USD)

As wide spreads and sudden price movements may occur within a short period, it is important for investors using high leverage to be cautious.

What Should Investors Pay Attention To?

When trading on FOMC days, it is recommended to pay attention to the following points:

• –Keep trading volume lower than normal.
• –Do not neglect using a stop-loss.
• –Be cautious against sharp movements in the first few minutes.
• –Be sure to follow the press conference as well; the main direction is often established here.
• –Rather than trading based on a single statement, it may be healthier to wait for the market's initial reaction to settle.

Conclusion

Today's FOMC interest rate decision and the statement by the FED Chair are among the most important economic developments of the week, or even the month.

Rather than whether the interest rate changes or not, the FED's forward-looking messages will determine the direction of pricing in global markets. Investors trading particularly in gold, the dollar, forex pairs, stocks, and cryptocurrency markets need to be prepared for high volatility during the announcement hours.

As FXPARTNER, we closely follow developments and will continue to regularly share with you the effects of major economic events on the markets.