Week Ahead: Fed Takes Centre Stage Wednesday, BoJ Closes It Out Friday

Week Ahead: Fed Takes Centre Stage Wednesday, BoJ Closes It Out Friday

by David Coulling Comment Closed
Week Ahead: Fed Takes Centre Stage Wednesday, BoJ Closes It Out Friday It’s a big central-bank week. The clear highlight is Wednesday’s Federal Reserve decision, with the Bank of Japan following on Friday. Markets are pricing a hold from both, but the tone and guidance will matter more than the decision itself — especially with oil still elevated and inflation sticky across major economies. Wednesday – Federal Reserve The FOMC is widely expected to leave the fed funds rate unchanged in the 3.75–4.00% range after September’s 25 bp hike. Futures and economist surveys show only low-teens odds of another move this week, with a December hike now the base case. Chair Kevin Warsh and other officials have recently pushed back against consecutive hikes, stressing patience and data dependence. Expect a “hawkish hold”: rates steady, but the statement and press conference (2:30 pm ET) likely keep December firmly on the table and flag upside inflation risks. Possible market reaction A measured hold with no...
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Yesterday’s FOMC: Hawkish Pivot Boosts the Dollar

Yesterday’s FOMC: Hawkish Pivot Boosts the Dollar

by David Coulling Comment Closed
Yesterday’s FOMC: Hawkish Pivot Boosts the Dollar The Fed held the federal funds rate steady at 3.50%–3.75%, as widely expected. But the real story was in the details: The policy statement was dramatically shortened and stripped of forward guidance. The Summary of Economic Projections (dot plot) turned notably hawkish: nine officials now see at least one rate hike by year-end, with 2026 inflation forecasts revised higher (PCE to 3.6%). Warsh emphasised data-dependence, inflation as a “choice,” and a commitment to restoring credibility. Markets reacted with a risk-off move (stocks sold off), but the US Dollar Index (DXY) jumped, breaking toward the 99.50–100.00 zone. Higher US rate expectations relative to the rest of the world provided immediate support. This Morning’s BoE Decision: Further Tailwind for USD The Bank of England held its Bank Rate at 3.75%, in line with expectations, but the accompanying tone and vote split reinforced a more cautious stance amid soft UK labour data and easing inflation pressures. GBP/USD dropped over 100...
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