Investors are keenly watching the Federal Reserve’s upcoming policy update on Wednesday, which will provide new forecasts for interest rates for the first time in three months. The Federal Open Market Committee, led by Chair Jerome Powell, is widely expected to keep borrowing costs steady for a seventh consecutive meeting. However, there is uncertainty regarding the Fed’s rate projections, with a plurality of economists predicting either one or two rate cuts in the closely watched “dot plot.” After significant rate hikes since March 2022, the Fed has maintained rates at a two-decade high since July, with officials recently indicating no rush to cut rates amid persistent inflation and solid growth outlooks.
Meanwhile, globally, several other central banks and economic data releases are in focus. The Bank of Japan is expected to discuss potential reductions in bond purchases, which could impact the yen. China’s inflation and industrial production data, as well as key economic indicators from the UK, Eurozone, and various other regions, will provide insights into their economic conditions and potential central bank actions. In Latin America, Brazil’s inflation report and central bank surveys will be closely watched, along with economic updates from Colombia, Argentina, and Peru. These events collectively will offer a broader view of the global economic landscape and potential monetary policy adjustments.