As Members of the FOMC Raise Interest Rates Forecast, Dollar Rises

Azeez Mustapha

Updated:

Unlock Daily Forex Signals

Select a Plan

£39

1 - month
Subscription

Select

£89

3 - month
Subscription

Select

£129

6 - month
Subscription

Select

£399

Lifetime
Subscription

Select

£50

Separate Swing Trading Group

Select

Or

Get VIP forex signals, VIP crypto signals, swing signals, and forex course free for lifetime.

Just open an account with one our affiliate broker and make a minimum deposit: 250 USD.

Email [email protected] with a screenshot of funds on account to get access!

Sponsored by

Sponsored Sponsored
Checkmark

Service for copy trading. Our Algo automatically opens and closes trades.

Checkmark

The L2T Algo provides highly profitable signals with minimal risk.

Checkmark

24/7 cryptocurrency trading. While you sleep, we trade.

Checkmark

10 minute setup with substantial advantages. The manual is provided with the purchase.

Checkmark

79% Success rate. Our outcomes will excite you.

Checkmark

Up to 70 trades per month. There are more than 5 pairs available.

Checkmark

Monthly subscriptions begin at £58.


The dollar has risen after the Federal Reserve boosted its median federal funds’ rate prediction for 2023 from 0.1 percent to 0.6 percent. That is, by the end of 2023, two rate hikes are possible. In addition, seven FOMC members expect one or more rate hikes in 2022, compared to four in March. By 2023, 13 members projected at least one raise, up from just seven in March.

The Federal Open Market Committee (FOMC) stated on Wednesday that the benchmark interest rate, or target range for federal funds, will remain unchanged at 0% -0.25%, as expected. Despite the fact that the Fed kept its policy settings intact, the hawkish move in the Summary of Economic Forecasts appears to be helping the dollar. At the time of writing, the US Dollar Index was trading at 90.95, up 0.48 percent for the day.

Since the FOMC pronouncement, the USD/JPY has gained more than sixty pips. It recently hit a high of 110.49, it’s best since early April. The pair was buoyed by a stronger US currency and higher US rates. In addition, the members raised their inflation predictions. These moves raised US yields and the dollar in general. The bulls are being beaten down by the bears as the US Federal Reserve becomes more hawkish as it monitors inflation threats that may turn out to be bigger and longer-lasting than predicted.

GBP/USD is currently trading at 1.4012, barely off its day’s lows of 1.4011 after sliding from a high of 1.4132. Since the Fed’s statements, the pound has lost 0.66 percent against the US dollar.

Powell Statement: FOMC Kept Policy Unchanged

Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, spoke on the policy outlook after the Federal Open Market Committee (FOMC) decided to leave the policy rate unchanged within the target range of 0-0.25 percent.

“Will continue to buy at least $80 bln/month of treasuries and $40 bln/month of mortgage-backed securities until ‘substantial further progress’ made on maximum employment, price stability goals.” “Will maintain current fed funds rate until the labor market has reached maximum employment and inflation has risen to 2% and is on track to moderately exceed that for some time.”

“Indicators of economic activity and employment have strengthened amid progress on COVID-19 vaccinations.” “Will maintain the accommodative policy until inflation runs moderately above 2% for some time, so that inflation averages 2% over time and longer-term inflation expectations remain well-anchored at 2%.”

“Sectors most adversely affected by pandemic remain weak but have shown improvement.” “Path of the economy depends significantly on the course of the virus.” “Vote in favor of policy was unanimous.” “Temporary US dollar swap lines extended with 9 central banks through Dec. 31.”

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Leave a Reply

Your email address will not be published. Required fields are marked *