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    What will US Fed do at its meeting this week? Experts discuss

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    What will US Fed do at its meeting this week? Experts discuss

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    The market does fuss over the FOMC statement quite a bit. The most important thing will be - the forward guidance on rates.

    The big decision from the US Federal Reserve will be released soon. With almost all Federal Open Market Committee (FOMC) policymakers who have spoken since the last FOMC meeting in March having indicated varying degrees of comfort with hiking interest rates by 50 basis points (bps) at its policy meeting -- markets are penciling in a 50 bps hike in Fed funds rate.
    The other important thing expected is the announcement on starting the reduction of the size of the Fed's balance sheet.
    The market does fuss over the FOMC statement quite a bit. The most important thing will be - the forward guidance on rates. The relevant sentence in the last FOMC statement was - "anticipates that ongoing increases in the target range will be appropriate". This is expected to be repeated this time as well, leaving the Fed with enough flexibility on quantum of hikes it deems appropriate going forward beyond this meeting.
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    To the post meeting press conference where the Q&A with Fed Chair Jerome Powell takes place, markets expect the Fed Chair to convey the need to quickly return the funds rate to neutral territory and the likelihood that the Fed funds rate will need to go into restrictive territory even.
    For the entire discussion, watch the accompanying video
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