Economics
US open – Can Fed live up to expectations?
Cautious optimism ahead of the decision Stock markets are edging cautiously higher on Wednesday, as investors await the outcome of the Federal Reserve monetary policy meeting. Fed Chairman Jerome Powell used his virtual Jackson Hole platform last month to announce changes to the central bank’s monetary policy framework, targeting average inflation of 2%; in effect […]

Cautious optimism ahead of the decision
Stock markets are edging cautiously higher on Wednesday, as investors await the outcome of the Federal Reserve monetary policy meeting.
Fed Chairman Jerome Powell used his virtual Jackson Hole platform last month to announce changes to the central bank’s monetary policy framework, targeting average inflation of 2%; in effect allowing for inflation overshoot after a period of falling short. Given the length of time that inflation has done just that, investors were buoyed by the prospect of an even more prolonged period of zero interest rates and perhaps even more stimulus.
While we’re not anticipating more easing today, there is an expectation that the Fed will provide further colour on the changes announced last month. What exactly does this mean for monetary policy? Can we expect more asset purchases? Negative interest rates? Yield curve control? At what stage should we factor in rate increases?
I’m not naive enough to expect answers to all of these questions today but the Fed will need to display a dovish shift from the last meeting, reflecting the commitment to the new framework. And more detail may be demanded regarding what the change means in reality. I wonder whether the Fed is positioned to disappoint.
Inflationary pressures have risen more than expected in recent months and the economy is bouncing back better than expected, as evidenced by the OECD’s new economic projections. The US is now expected to contract by 3.8% this year, an improvement on the -7.3% projection in June. Against this backdrop, I can’t imagine the Fed will be keen to make overly bold promises.
Economic Calendar
For a look at all of today’s economic events, check out our economic calendar.

Here’s What Retail Investors Are Most Interested In Buying
Here’s What Retail Investors Are Most Interested In Buying
U.S. retail investors, enticed by a brief pause in the interest rate cycle, came…
Ticking Time Bombs: 3 Homebuilder Stocks to Dump Before the Damage Is Done
The housing market is in a tricky spot right now. Higher interest rates are causing problems and distortions in the market. With the average interest rate…
Don’t Miss the Boom: 3 Fintech Stocks Set to Explode Higher
The fintech sector has significantly benefited from the advances in technology and the past few years have seen a solid growth of this sector. The pandemic…
-
Uncategorized10 hours ago
Closing Bell: Nothing inflated about ASX as steady August CPI baked into latest loss, benchmark now short -2.4pc this week
-
Energy & Critical Metals20 hours ago
Germany Edges Closer to 50% Renewable Energy Milestone Amid Solar Slowdown
-
Uncategorized13 hours ago
High Voltage: PMT’s Corvette lithium resource could be a 300Mt titan… if an ENTIRE LAKE can be drained first
-
Financing News23 hours ago
West High Yield (W.H.Y.) Resources Ltd. Announces Appointment of New Auditor
-
Economics19 hours ago
USD/CHF: Franc suffers longest losing streak since 1975
-
Economics24 hours ago
Don’t Miss the Boom: 7 Dividend Stocks Set to Explode Higher
-
Economics23 hours ago
Ticking Time Bombs: 3 Blockchain Stocks to Dump Before the Damage Is Done
-
Precious Metals14 hours ago
First-Ever Filming Of Singapore’s Gold Reserves In Super-Secret Gold Vault