The Federal Reserve is set to announce its rate decision today at 2:00 PM ET, with Chair Jerome Powell scheduled to hold a press conference at 2:30 PM ET. A widely anticipated 25-basis-point rate cut is expected, although the Fed may adopt a hawkish stance due to ongoing uncertainties in economic data. This cautious approach comes as the market awaits significant reports on inflation and employment, which are expected to be released next week after delays caused by the recent government shutdown.
In its last meeting in September, the Fed projected the following key economic indicators: a Fed Funds rate of 3.4%, GDP growth at 1.8%, an unemployment rate of 4.4%, and both PCE and core PCE inflation rates at 2.6%. Today’s announcement will likely revise the Fed Funds rate projection closer to 3.75%, reflecting new data and economic conditions.
The press conference following the rate decision will provide an opportunity for Chair Powell to clarify the Fed’s perspective on economic risks and potential policy adjustments. Typically lasting between 50 to 60 minutes, this session is crucial for investors seeking insight into the Fed’s future direction.
Market Focus on Major Currency Pairs
Traders are closely monitoring the technical levels for major currency pairs such as EURUSD, USDJPY, and GBPUSD, as they prepare for potential market movements following the Fed’s announcement. Insights into these pairs could help set the trading tone for the day.
In addition to the Federal Reserve’s actions, the Bank of Canada will also release its rate decision today, with expectations for rates to remain unchanged at 2.25%. Market participants are particularly interested in the central bank’s tone following stronger job data reported in recent months. Governor Tiff Macklem may provide guidance on whether the bank is considering a shift in policy or if it will maintain a cautious approach in light of economic developments.
As the day unfolds, both the Federal Reserve and the Bank of Canada will shape the economic landscape, influencing currency markets and investor sentiment.
