Less than six hours later, the markets are awaiting the results of the US Federal Reserve meeting, which began yesterday, Tuesday, to discuss developments in monetary policy and interest levels, as expectations indicate that the Fed will resume the process of raising interest rates by 25 basis points, to reach 5.50%, at their highest levels in 22 years.

After ten consecutive meetings of tightening monetary policy and raising interest rates to fight inflation, which peaked at 9.1% in July of last year, its highest level in 40 years, the US Federal Reserve stopped raising in June to monitor and evaluate what was done in the previous period while keeping the option of intervention and hike. open.

The last reading of inflation from the United States of America, according to the Bureau of Labor Statistics for the annual indicator over the past 12 months, came at 3% in June compared to 4% in May, while expectations were for an increase of 3.2%, recording the lowest pace of growth since March 2021, and the annual core index excluded rose. Including food and energy prices to 4.8% year on year in June from 5.3%.

After the previous Fed meeting, the markets began to see two rate hikes before the end of the year, but expectations changed after the recent numbers, as according to the estimates of the futures markets from FedWatch issued by CME, the markets priced to raise interest rates by 25 basis points at the Bank’s meeting today by 99%, but the market expectations for interest rates to remain At these levels, 5.50% in the next three meetings after today’s meeting (September-November-December) rose to more than 65% compared to less than 10% after the last meeting of the Fed, and therefore I expect that the markets will focus today on this change and whether the Fed will close the door to Any additional interest rate hike during the current year, in addition to the starting date for reducing interest rates.

With the absence of quarterly forecasts and points chart, the markets will watch the press conference of Federal Reserve Chairman Jerome Powell and his signals about what is coming after the tightening cycle, and journalists will try to extract any hints regarding the period for interest rates to remain high.