Investors have taken significant sales of securities and shares on the eve of the meeting of the Federal Reserve, but will need a pretty serious market shock to deny the central bank to raise interest rates, writes Financial Times.
It is unclear what signals will give the Fed on Wednesday on further steps to raise rates in the coming years. The decision to raise interest requires a compromise between different views in the leadership of the bank, therefore it can be expected assurances that the next steps will be moderate. While the Fed does not want to limit its scope for action too specific commitments.
Almost secure solution
Chairman Janet Yellen and other members of the leadership of the Fed repeatedly said that the rise in interest rates at the December meeting is very likely that, unlike the October meeting, before which tried to dispel such expectations. Strong data on the labor market also supported forecasts that this week the Fed will finally decide to act.
Earlier this month, Yellen said that inflation projections are enhanced by strong employment data, which sounded like an assessment that the basic requirements for increasing the interest rates are achieved. The nervousness of the markets in recent days has prompted some analysts to question whether the Fed will again postpone the increase. Most experts, however, believe that in this case, Yellen would have made a clear signal this possibility, pointing to the need for stability in the financial system. Moreover, the Fed would not want to seem dependent on short-term market movements.