Rate Hike Expectations Strengthen Ahead of Fed Decision

Rate-hike expectations strengthened as the Federal Reserve began its two-day meeting on September 15-16, US time. A Reuters poll from September 14 found that 86 of 101 economists expected a 25-basis-point increase to 3.75%-4.00%. The decision is due on September 17 at 02:00 Beijing time, followed by the Chair's press conference at 02:30.

The Federal Reserve's updated economic projections and interest-rate dot plot will be crucial in determining market response. A tighter-than-expected path would pressure valuations and financing costs, while a statement that does not reinforce tightening expectations could allow some risk premium to ease.

Market impact on technology stocks and crypto assets extends beyond one decision to how high rates need to go and how long they remain there. Higher oil prices can support upstream producers' revenue but increase costs for airlines, logistics, and manufacturing, potentially prolonging monetary tightening.