Experts: the Fed is likely to keep the rate, but the election results are more important for the dollar


Most Wall Street economists predict that the US Federal Reserve (Fed) at the next meeting, which will be held November 7-8, will leave the interest rate unchanged (at 2-2.25%), but will give a signal of readiness to increase it in the last month of this year.

Experts estimate the probability of a rate hike in December at 75%.

"We believe that the regulator will not attach much importance to the decline observed recently in the US financial markets, and will not mention it in the final statement. This time, the short-term reaction of the markets, as well as the dollar rate to the results of the congressional elections, may be stronger than the response to the next Fed meeting," representatives of Bank of America Merrill Lynch noted.

"In November, the Fed is likely to set the stage for a rate increase in December and three more such rounds next year. Thus, the US Central Bank will raise the rate during the first three quarters of 2019, even despite the threats associated with the intensification of the trade conflict between the United States and the Middle Kingdom. The cycle of tightening of monetary policy should be completed on this," the specialists of ING Bank believe.

Recall that at the previous meeting, held in September, the regulator raised the rate for the third time since the beginning of the current year, by 0.25%

The material has been provided by InstaForex Company -