Fed Interest Rate Decision (Clarification)

14 gru 2022

The interest rate decision issued by the US Federal Reserve🇺🇸

Clarification

The Federal Open Market Committee meets eight times each year to set the short-term interest rate. After the meeting, the Bank publishes a statement containing the decision on the interest rate, a brief commentary on the economic conditions that influenced their decision, and, most importantly, it contains indications as to the outcome of future meetings. The decision to set interest rates depends mostly on inflation. Because the primary goal of the central bank is to achieve price stability; Thus, when inflation rises above about 2%, the bank raises the interest rate in an attempt to lower prices. An upward trend in interest rates has a positive effect on the country's currency. Short-term interest rates are a factor in currency appreciation, so traders watch most other indicators just to predict how interest rates may change in the future. High-interest rates attract foreigners who are looking for the best return with the least risk on their money, which leads to an increase in demand for the country's currency.

FED affect



if the result is released under 4.50% it will be negative for the USD Index and positive for commodities , indices, and pairs against the Dollar

if the result is released above 4.50% it will be positive for the USD Index and negative for commodities , indices, and pairs against the Dollar

If the result is released at 4.50% it looks good for the USD Index and its look bad for commodities , indices, and pairs against the Dollar but it will have a lot of volatility