Fed Rate Decision Set to Shake Markets with Hawkish Tone
The highly anticipated interest rate decision by the Federal Reserve is set to shake the markets. The bank is widely expected to raise rates by 25 basis points, with another hike planned for December's meeting. A sufficiently hawkish tone from the Fed could support the US dollar while weighing on US stock markets and gold's price.
US equities edged lower yesterday ahead of the rate decision. A hawkish Fed could weigh on US stocks, but a less-than-expected tone could see them gain. Market worries about AI technology outlook and high oil prices continue to impact profit margins.
The Fed's decision will also be closely watched for its forward guidance, including the accompanying statement, new dot plot, and Chair Warsh's press conference. A hawkish tone could enhance market expectations for further rate hikes, potentially benefiting the US dollar but hurting gold's price.