The Federal Open Market Committee (FOMC) voted unanimously to raise interest rates by 75 basis points, as expected, for the second time in a row, to reach 2.5%, as expected, in the largest pace of monetary tightening since 1994. The Federal Reserve is seeking to tighten the screws on rising inflation, which reached its highest level in forty years in June (9.1%) by tightening monetary policy since the beginning of the year.

Powell confirmed in his press conference more than once that the Fed is ready to go to any stage to bring inflation back down, as Powell kept market expectations of a 75 basis point rate hike in September on the table and stated more than once that the committee is determined and will not hesitate, which means that even the rate hike process By 100 basis points, it is not excluded if the numbers are strong in the coming period.

The markets, according to the estimates of the futures contracts, are currently quoting the interest rate hike by 50 basis points at the September meeting by 65%, while it is priced at 35% by the rate of hike by 75 basis points, and this explains the decline in the US dollar, as Powell left the data to determine the next hike rate in September and thus The market will move in the coming period until the next meeting, based on economic data.

Powell also confirmed that it is harmful for economic growth to slow down, but he does not expect the US economy to witness a recession.

Therefore, attention is turning today, Thursday, towards the growth figures for the second quarter of this year, especially after the US economy contracted by 1.6 percent in the first quarter, and therefore any negative numbers

today mean the entry of The US economy is in recession (a recession means two quarters of negative growth). Estimates indicate that growth figures will come to 0.4% in the second quarter.

Will the numbers come to give the US Federal Reserve the impetus to complete its plan to tighten monetary policy for an additional six months, or will it violate expectations and enter the US economy into a technical recession?

The US dollar reacted negatively after the Fed’s decision with the strategy of buying the rumor and selling the news, as the general index of the US dollar lost about 0.75% at the close and is now trading at 106.25 levels.