The attention of traders and markets during Wednesday’s late session is directed towards the results of the Federal Reserve’s meeting, which started since yesterday, Tuesday, in a closed session, where the Reserve Bank is expected to raise interest rates by 25 basis points, to reach 5%.

Inflation figures in the United States of America increased by 0.4% in February, after an increase of 0.5% in February, while the main index excluding food and energy prices rose to 0.5%, compared to 0.4% in January. On the other hand, the annual index increased over the past 12 months to 6.0% from 6.4% in January, while the annual basic index, excluding food and energy prices, fell to 5.5% in February from 5.6%.

After Jerome Powell’s testimony before Congress in early March, market expectations rose that the US Federal Reserve would move towards stronger tightening of monetary policy in March.

Expectations of a hike rose by 50 basis points to more than 80% before the banking crisis represented by Silicon Valley Bank came to raise market fears, especially since the crisis It came after the strong rise in US interest rates.

Fears of contagion and turmoil from a banking crisis that might hit the US and global economy pushed expectations of US interest rates to a decline, as futures expectations by the CME FEDWatch tool now see a 25 basis point hike in interest rates at the March meeting, by about 84%, while it witnessed a radical change, as expectations rose The US Federal Reserve kept interest rates unchanged to 15%, after they were out of the equation until just two weeks ago, and expectations of a 1% cut in interest rates until the end of the year rose to more than 32%.

The Fed is now between the fire of rising inflation and fighting it, and between the fire of the liquidity crisis and the banks that may re-emerge in the event that the Fed makes a strict statement that it will continue to raise interest rates, even if it raises them today by 25 basis points.

Some expectations indicate that the US Federal Reserve may keep interest rates unchanged to reduce the banking crisis and not appear on the surface, especially since the US bank’s losses resulting from the decline in the value of bonds as a result of the interest hike exceeded $600 billion, but the problem here is that the Federal Reserve may lose its credibility and explain the markets That the catastrophe is greater than it appears and thus causes high volatility and a fall in US stocks.

Attention is directed to monitor the statements of the President of the Federal Bank and the points scheme for the future of interest rates from the members of the bank, which are issued for the first time since December, to be the main movers of the markets during this week and the coming period.

expected movement scenarios

Raise by 25 basis points calculated in the current prices and Powell’s statements and future expectations of interest will be the main driver for the markets.

Failure to raise interest will cause strong movements in the markets, gold will rise, the US dollar will decline, and stocks may rise temporarily.

A rate hike of 50 basis points supports strong gains in the US dollar and declines in US stocks.