Finally, the curtain came down on the first meeting of the Federal Reserve for the new year 2022, yesterday, Wednesday, January 26, when it came in a large proportion, in line with expectations that the bank would keep the current monetary policy unchanged and maintain the current interest rates at 0.25%, while the statement issued on the interest was identical to the statement of the December meeting, where The statement stressed that economic activity continued to recover and grow despite the impact of Pomicron in the recent period, and that the course of the economy still depends on the path of the virus.

With inflation exceeding the bank’s long-term target of 2%, interest is expected to be raised soon, the committee decided to continue reducing purchases and it is scheduled to end in early March, as the committee will reduce in February at least $ 20 billion per month in Treasury bonds, and no Less than 10 billion of mortgage-backed securities.

The statement, as we mentioned, was balanced and formed support for stock markets, and the US dollar stabilized before Jerome Powell started talking in the press conference in which the US Federal Reserve president appeared more hawkish than expected, as Powell stressed that inflation poses a strong risk, and the risks are considered higher than expected, and that it is unlikely to be resolved. Supply chain problems this year, which means that inflation increases are continuing.

These fears from Powell and his answer to journalists’ questions that the Fed does not rule out that there will be an interest rate hike in each of the Fed’s meetings and that no decisions have been taken regarding the size of the interest rate movements. It is expected that we will witness a hike of the interest rate by more than four times during the current year, and it is also not unlikely that we will witness a hike of 50 basis points in the March meeting.

Futures contracts expectations, after they were priced less than 3%, rose by half a point in the March meeting, now they are priced by more than 20%, up by 50 basis points in March, and this is an explanation for the clear positive market movements for the US dollar, with the general index of the US dollar rising by more From 0.50%, as it started to raise prices by half a point, the conference was negative on the stock and gold markets in general.

The US dollar is trading Thursday morning at 96.65 levels, up by 0.20% today, at its highest level in 6 weeks, while the euro is close to surpassing last November’s low, which was centered at 1.1187, by trading at 1.1217 this morning.