The Federal Reserve is set to hold rates this week: Why a December hike is virtually fully priced anyway
The US Dollar (USD) maintains a well-supported stance across global FX markets as traders anticipate the Federal Reserve will keep the Fed funds rate steady at 3.75–4.00% at its upcoming policy meeting on Wednesday.
The US Dollar (USD) remains well-supported in global FX markets, with traders anticipating the Federal Reserve will maintain the Fed funds rate steady at 3.75-4.00% during its policy meeting on Wednesday. Futures markets currently price in only a 10% chance of an October rate hike, shifting investors' focus to the strength of US economic growth and persistent price pressures.
Brown Brothers Harriman (BBH) and TD Securities analysts project the Fed will keep interest rates unchanged at 3.75-4.00% this week, with a December hike being virtually fully priced in. Q3 GDP growth is expected at 3.2% annualized, while September's core PCE inflation accelerated to 3.1% yearly. These factors suggest strong US economic activity and rising price pressures that will sustain the Greenback's yield advantage, with a December rate hike likely to follow.
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