It is unlikely that the President of the US Federal Reserve will comment specifically on his next plans. Investors will therefore pay attention to the nuances.
(Photo: Reuters)
Frankfurt In all likelihood, the US Federal Reserve will announce an increase in the key interest rate by a quarter of a percentage point to a range of 5.0 to 5.25 percent on Wednesday evening. This is what many experts have said at the moment. The slump in many bank shares in the USA on Tuesday does not seem to have fundamentally changed this expectation, which also prevails on the markets. The Fed last hiked interest rates by 0.25 percentage points in March.
In addition, it is likely to continue to reduce the holdings of interest-bearing securities on its balance sheet as planned. As a result, it tends to support long-term returns on the capital market and drains liquidity from the financial system.
The markets are prepared for this. The question of what Fed Chair Jerome Powell says about the next decisions in the coming months will be more exciting. With the banking crisis still smoldering, the probability that the last rate hike in this cycle will happen on Wednesday should have increased somewhat.
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