Investing.com – The next meeting of the Federal Reserve Policy Policy is large, but markets do not expect much from the meeting, according to Bank of America Securities, with more focus on messages from the White House than the Central Bank.
The meetings next week, concluding the last meeting on January 29 and is generally expected to stay on hold after the relatively ragged message in December.
“We regard the January -fed meeting as mainly as a temporary designation,” said analysts at Bank of America Securities, in a note of January 22. “The FED will most likely remain on hold. After the FOMC had yielded a ragless message in December, a grip was clearly the basic case in January. The data flow has since validated more havel -like market prices. In particular, the labor market seems to have stabilized around Full employment.
Fixed markets currently project a 99.5% chance that the interest rates are kept stable at their current level of 4.25% to 4.5%, according to the CME Fedwatch tool.
Investors do not expect a major shift in policy guidelines during this meeting and push back to the recent FED price determination.
“The FOMC instruction should not be changed much,” Boa added. “A possible revision would be to upgrade the description of the labor market conditions of ‘since earlier in the year, the labor market conditions in general have risen and the unemployment rate has risen, but remains low’ to ‘labor market conditions have been stabilized in recent months, and the Unemployment rate remains low ‘. “
The foreign exchange market is currently more focused on White House messages than the Fed, the American bank added.
“Larger uncertainties (and sources of FX volatility) continue to arise from the prospects for trade policy, while the more implications are fed in the short term (ie the FOMC of January) appear to be relatively more good.”
