The Fed’s two-day meeting started today. The regulator will announce the decision on the rate on September 21

The Fed’s two-day meeting started today. The regulator will announce the decision on the rate on September 21, at 21:00 Moscow time. The press conference of the head of the Fed will be held on the same day at 21:30 Moscow time.

At the moment, the probability of the Fed raising the rate by 75 bps, to 3-3.25%, is 84%, by 100 bps — 16%.

🔹 Dmitry Dorofeev, Portfolio Manager of Alfa-Capital Management Company: “We see a trend towards tightening monetary policy, rather hawkish comments from the leaders of the American Central Bank, in principle, we cannot rule out a stronger increase — by 1% at once.

Inflation in the US has not decreased yet, although it has slowed down growth, so the current increase will not be the last. We expect the Fed rate to rise to 4%, and at the beginning of next year it will be possible to see an increase to 4.5%.”

Vladislav Silaev, Senior trader at Alfa-Capital Management Company: “The main stock exchange indicators will not change significantly before the Fed rate decision, the main movements should be expected based on its results.”

Dmitry Monastyrshin, Chief analyst of the PSB: “The maximum level of the Fed rate in the current tightening cycle is estimated by investors at the level of 4-5%. The peak of the Fed rate is expected to be reached in the first half of 2023. The tightening of the Fed’s monetary policy will provoke a slowdown in business activity and an increase in the cost of borrowing not only in the US, but also for emerging markets.”

Ekaterina Krylova, managing expert of the PSB: “The focus of investors’ attention will be even more on the Fed’s rhetoric and expectations regarding the economy and rates in the future, even more than on the actual rate. If the regulator is rigidly adjusted, then investors will not escape from risky assets.”

Oksana Kholodenko, BCS World of Investments expert: “It is worth paying attention to Jerome Powell’s press conference, the FOMC’s digital forecast on economic indicators and the rate, information about the process of winding down the Fed’s balance sheet. The risks of a technical recession in the United States may lead to the suspension of the key rate increase in 2023.”