Read full post at forexlive.com
Synopsis: BofA anticipates the Federal Reserve will keep its policy rate unchanged in July, signaling progress in reducing inflation while maintaining a data-dependent approach for future rate cuts. The USD’s reaction will hinge on Chair Powell’s tone and any hints about a September rate cut.
Key Points:
Policy Rate and Inflation:
Future Rate Cuts:
Market Pricing:
Scenario Analysis:
Conclusion: BofA expects the Fed to maintain its policy rate unchanged in July, with a focus on progress in reducing inflation and a data-dependent approach for future rate cuts. The USD’s reaction will depend on Powell’s tone and any signals about a September rate cut, with the market currently pricing in a full cut in September and additional cuts by year-end. The July FOMC meeting is likely to be a placeholder, with limited scope for a sustained move in the USD, while upcoming economic data and Powell’s Jackson Hole speech will provide further guidance.
For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.
This article was written by Adam Button at www.forexlive.com.
Leave a Reply