CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Regulator:

×
CySEC

Skilling Ltd, is regulated by the Cyprus Securities and Exchange Commission (CySEC) under CIF license No. 357/18

Continue
FSA

Skilling (Seychelles) Ltd, is authorized and regulated by the Financial Services Authority (FSA) under license No. SD042

Continue
Market Insights

Fed meeting preview 25 bps hike expected

Blog Images - Skilling (4).png

Expectations are for the Fed to hike rates by 25bps at the March meeting which seems likely but traders should carefully watch the dot plot which indicates Fed members’ views of future rate hikes which could exceed market expectations.

Fed Chair Powell recently stated that “with inflation well above 2% and a strong labour market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month.”

In terms of his own personal view: “I am inclined to propose and support a 25bp rate hike.” He added that he saw a “series” of rate hikes likely thereafter. Finally he noted the Fed could “be prepared to move more aggressively by raising rates by more than 25bp” at one or more of their meetings.

The Latest Dot Plot - Could It Be More Hawkish Than the Market is Anticipating?

How much and how quickly the Fed will hike the dot plot will give clues. The last dot plot dates back to December, which pointed to three 25bp rate hikes for this year and another three for 2023. A lot has changed since December, and this time, the dots are likely to move higher. We could see a more aggressive and longer Fed hiking cycle than the market is currently pricing in, which we can see on the chart below:

fed meeting image

In terms of the reduction of the Feds $8.9tn, it will probably be too early for Powell to give much guidance on when it will be reduced but the general consensus is they will probably look at it towards the end of Q2.

USD To Remain Firm Against Hawkish Fed & Russia Stagflation Shock?

Many investors see the Fed as being cautious given the Ukraine / Russia crisis but it’s important to keep in mind that the US economy has limited exposure to Russia which will allow the Fed to hike rates. The USD is likely to continue to remain firm against a backdrop of a robust economy, a central bank consistently hiking rates and a deteriorating overseas economic environment.

The stagflationary impact from the Russian commodity supply shock is a negative for global growth and especially for those economies in Europe and Asia where export trade and manufacturing are more important than in the US. The same logic applies to the emerging market economies.

Scaddon Analysis: For Daily FX Video Analysis & Education Click Here
Information on this website does not constitute endorsement or recommendation by Skilling.

Not investment advice. Past performance does not guarantee or predict future performance.

Related Articles

Rate hikes & FX: bigger, faster, longer... recession?

Ever since US inflation came in hot and the Fed surprisingly beefed up their rate hike to 75bps, there’s been a LOT of a...

Tesla "losing billions of dollars"

Elon Musk recently appeared on a podcast interview with Tesla Owners of Silicon Valley. Musk’s comments reveal the chall...

Apple - can this tech giant break into advertising?

Another week, another tumble for US stocks. Even tech mammoths like Apple are being sold. Since the 30th March high, App...

Important notice

This page/website is not directed to EU clients and falls outside the European regulatory framework and is not in the scope of (among others) the Markets in Financial Instruments Directive (MiFID) II.
By continuing you acknowledge to view the content provided by Skilling (Seychelles) Limited, which is authorised and regulated by Seychelles Financial Supervisory Authority, and that your decision was made independently and at your exclusive initiative and no solicitation or recommendation has been made by Skilling or any other entity within the group.

Continue

Important notice

This page/website is not directed to EU clients and falls outside the European regulatory framework and is not in the scope of (among others) the Markets in Financial Instruments Directive (MiFID) II.
By continuing you acknowledge to view the content provided by Skilling (Seychelles) Limited, which is authorised and regulated by Seychelles Financial Supervisory Authority, and that your decision was made independently and at your exclusive initiative and no solicitation or recommendation has been made by Skilling or any other entity within the group.

Continue