While we wait for the Fed Rate decision, let's quickly look at the prior economic projections on Dec 15 2022. The committee will be announcing the interest rate decision today and also release the Statement of economic projections.
Between the Policy on Feb 1, 2023 to now, the financial landscape has materially changed following the collapse of 3 US banks and taker over of a Swiss Bank which complicates the task at hand of managing elevated and sticky inflation on the one side and banking crisis on the other hand.
Which way will Fed lean will be clear in 5 mins. This blog is with market consensus and expects a 25 bps hike.
Markets are pricing in a 83.40% probability for a 25 bps hike in today's policy. US 2Y and US 10Y yields are trading 4.13% and 3.53% respectively. Euro has continued to appreciate and currently trades at 1.0795 and USDJPY at 132.54.
Table 1 Economic projections
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