According to market pricing and recently also according to a small majority of economists, the Federal Reserve will not raise rates today. This leaves the question open on the tone: a hawkish stance or a dovish one? Here are our 4 detailed scenarios.
Updates
Fed does not hike – USD initially slides
Yellen live blog
And what does that mean? Markets are pricing in a rate hike in December, the next time that Yellen holds a press conference. But wait, there’s also a meeting in October that is overlooked by markets.
By announcing that the October meeting will be accompanied with a press conference, she would give markets a huge hint, if not an outright declaration, that rates are rising in 6 weeks time.
She may accompany that by saying that it doesn’t necessarily imply a rate hike and the Fed remains data dependent, allowing room to back off if necessary. However, such a move would certainly be the major news of the day and would fit into the hawkish hold scenario.
What do you think?
Fed decision – all the updates
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