The Federal Open Market Committee (FOMC) of the US Central Bank will announce the rate hike decision on Thursday. Expectations that the FOMC will keep the target range for the federal funds rate at 5.25% to 5.5%, which is the highest level in 22 years.
The chairman of the Fed, Jerome Powell, signaled that the committee will assess the impact of recent rate hikes that they are in the final phase of the rate hike campaign. Although inflation is still above the US Central Bank's 2% target, the FOMC committee is expected to announce a "delay" for the second time this year. However, the Fed could raise interest rates by another 25 basis points at the end of the year if inflation picks up.
The annual rate of PCE, the Fed's preferred inflation indicator, rose to 3.3% in July from 3% in June. The job market has deteriorated, with unemployment rates rising.
Wall Street predicts a "relief" in September, but rising oil prices could threaten to push inflation up again. JPMorgan, Goldman Sachs, Morgan Stanley, Barclays, BNP, BMO, Bloomberg, Nomura, RBC, and Wells Fargo predict a delay in rate hikes. While Raymond James and Mizuho expect an increase of 25 basis points.
"We expect the Fed to keep rates unchanged at the FOMC meeting tomorrow, while maintaining a tightening bias. We think the 2023 median will continue to show another increase this year, while there is a risk that in the longer term it will be revised upwards.”
FedWatch's CME tool shows a 99% probability of a delay at the next FOMC meeting on September 20. The price of BTC increased by 1% in the last 24 hours, with the price currently trading at $27,096. The 24-hour high and low were $26,918 and $27,488, respectively. However, prices are still volatile ahead of the FOMC's monetary policy decision.
Bitcoin has risen as much as 5% on the week as traders expect significant upward momentum after the FOMC. This will bring back much-needed bullish sentiment in line with better technical chart patterns.
