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Eyes will be on the Federal Reserve and Chair Powell on Wednesday. During the Asian session, New Zealand will report Current Account figures, and the Tankan survey will be released in Japan. More inflation data is due in the US with the Producer Price Index (PPI). Here is what you need to know on Wednesday, December 13: The Federal Reserve will end its December meeting on Wednesday. No change in rates is expected, and the guidance is expected to maintain the same bias. Market participants will closely examine the new macroeconomic forecasts and Chair Jerome Powell’s comments, which could influence rate expectations for the next year. Analysts at TD Securities on FOMC:  The Fed is widely expected to again keep rates steady this week. Powell will have to walk a fine line by recognizing the ground gained towards the normalization of the economy while pushing back on the idea of early rate cuts. We expect the chairman to lean against the Committee’s likely dovish guidance at 2pm, with guarded hawkishness in the post-meeting presser. More inflation data is due in the US with the Producer Price Index (PPI), which is expected to show a month-over-month increase of 0.1% in November and an annual rate of 1%, below the 1.3% recorded in October. On Tuesday, the US Consumer Price Index (CPI) report aligned with market consensus. The CPI rose 0.1% in November, and the annual rate stood at 3.1%, below the 3.2% recorded in October. The core rate increased by 0.3%, and the annual rate remained at 4%. Analysts at Commerzbank on US CPI inflation:  The underlying inflationary pressure is thus decreasing, but only gradually. In view of these trends, it is unlikely that the Federal Reserve will raise interest rates again. However, a rate cut is also not realistic until…

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Filed under: News - @ December 13, 2023 1:22 am