Today (27 August) the annual symposium of central bank representatives organized by the Fed branch in Kansas City begins. Usually, the meeting takes place in Jackson Hole, but this time, due to the epidemic, it will be a virtual meeting, which can be viewed on Kansas City Fed's youtube channel.
The online symposium will begin at 15:00 Polish time and will be started by Esther George, president of the Kansas City branch of the Fed. At 15:10, investors' attention will be drawn by Federal Reserve Chairman Jerome Powell. His speech should end before 16:00 and may cover key issues for the markets. So what do investors expect?
Well, the Federal Reserve Chairman is expected to present several conclusions from the review of the central bank monetary policy framework. Jerome Powell is also likely to set a new direction for inflation, strengthen his commitment to full employment, and make some comments on the US economic outlook. The Federal Reserve, which has set the inflation target of 2% as a healthy inflation level, is now set to move this level to average inflation and allow for further periods of moderately higher inflation. This means that the Federal Reserve would like to cool down expectations of interest rate rises even if inflation was well above the target. Under the new monetary policy framework, the Fed is likely to keep short-term interest rates close to zero for five years or even longer.
On July 29, 2020, the Federal Reserve left the target interest rate range for federal funds unchanged at 0-0.25 percent but opened the door to further monetary easing to support the U.S. economy in the face of the pandemic.
This afternoon's events could have a particular impact on the US dollar and US stock market indices. The more dovish speech, the weaker the dollar could possibly be and the stock indices would be able to rise. The disappointment of the markets may in turn have the opposite effect.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
