SHAFAQNA Türkiye – The world’s leading central banks, especially the US Federal Reserve (FRS) and the European Central Bank (ECB), will meet next week to set interest rates amid signs that the inflationary crisis is easing.
While the Fed and ECB are both expected to raise rates by 25 basis points each, the focus will be on signals about the likelihood of further rate hikes or whether banks are planning an extended break.
On the other hand, the central banks of Japan, Indonesia, Hungary, Ukraine, Uzbekistan, Chile, Nigeria, Ghana, Malawi and Lesotho will also announce their policy rate decisions this week. The interest rate decision will be announced on Wednesday at 14.00.
IMPORTANT FOR GOLD AND BITCOIN
While macroeconomic data released around the world continue to give mixed signals, the impact of this situation on asset prices remains.
If the Fed signals that it will continue to be hawkish, pressure is expected on gold and bitcoin, and easing signals could pave the way for these assets by pushing the dollar against major currencies.
FED HAS A PEAK?
In line with market expectations, Fed policymakers are poised to raise rates to their highest level in 22 years this week. The Fed is expected to raise rates by another 25 basis points to a range of 5.25-5.5%, marking the 11th increase in the past 16 months.
In June, the Fed missed a rate hike for the first time in 15 months. It is not known whether the increase expected this week will be the last increase. According to experts, Fed Chairman Jerome Powell may want to keep the possibility of raising interest rates if necessary to avoid inflation.
While Fed Chairman Jerome Powell and ECB Chairman Christine Lagarde continue to warn that inflation is still too high, economists say the policy outlook for the rest of the year is uncertain.
FRS MEMBERS CAN SUPPORT Hawk’s position
“Inflation is slowing, but not fast enough for the Fed,” said James Knightley, chief international economist at global asset manager ING Financial Markets LLC. “While the job market remains strong, the authorities are leaving nothing to chance,” he said.
“Mixed economic data since the mid-June meeting sparked an internal debate about whether the increase at the July meeting will be the last,” said Anna Wong, chief economist at Bloomberg. We believe that many Fed members expect another rate hike this year. However, weak inflation data in June may have dampened confidence, he said.
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