Fed Set to Hike Rates by 25 bps

• Jerome Powell will answer questions from the press after the Fed Interest Rate Decision.
• Any hints on the future monetary policy can trigger significant market moves on US Dollar and other asset classes.

Jerome Powell, Chairman of the Federal Reserve System (Fed), will speak in a press conference on Wednesday at 18:30 GMT, 30 minutes after the Fed Interest Rate decision is announced. Powell’s speech will reflect the current views of the Federal Open Market Committee (FOMC) on monetary policy. 

The Federal Reserve is widely expected to deliver a 25 basis points interest rate hike, setting the Fed funds rate in the 5%-5.25% range. Powell’s press conference will provide hints on whether this might be the last interest rate hike of this cycle, or if rather the monetary policy tightening might continue in the coming months.

Jerome Powell will face tough questions by the press on whether the Federal Reserve can keep going with its interest rate hikes, considering the financial stress that the banking system has suffered recently, with First Republic Bank having been taken over by JP Morgan in the past week. Powell’s words will carry enormous importance for the market, with the US Dollar and the US Treasury bonds being the most-affected assets, and in turn, triggering volatility in most asset classes. 

The reality is murky, which means a messy market reaction. The bank's decision often triggers a whipsaw in markets – and this time, it may be first against the US Dollar, then in favor. In any case, trade with care, as Fed decisions tend to be messy.