By Michael Baker

The Federal Open Market Committee (FOMC) will deliver their verdict on the latest round of interest rates from the US when they meet tomorrow at 19:00 (BST). It is widely expected that the FED will pull the trigger on the first of two additional rate increases forecast for the remainder of 2018. With the potential for this already being priced into the USD, subsequent moves may follow FED Chair Jerome Powell’s statement at 19:00 (BST) and the press conference scheduled for 19:30 (BST).

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Investors will be picking apart the rhetoric used to outline forward guidance surrounding the expected hike in December and, more importantly, the path for rises into 2019. Key things to watch for are clues around inflation targets and how the recent trade tariff sagas with China affect their decisions on monetary policy going forward. With a strong job market and inflation close to the Central Bank’s 2% target, could the FED increase its forecast for 2019 rate hikes from three to four?

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