FOMC preview

Later today, the Federal Open Market Committee is expected to release a statement, which is an outcome of their 2 days meeting (Tuesday and Wednesday) regarding the economic outlook for the US economy, with major focus on when the committee is likely to hike rates. Market expectation at the moment is a bit neutral as no major action is expected from the FED’s statement.

However, market will keep an eye on the tone of the statement most especially regarding their view on the state of the economy. If the committee shows some satisfaction with the current and previous economic data, then we might see some reaction in the market regarding peculations of rate hike in the next meeting. But, if the committee still think they need to see more recovery from economic data, market might assume there is no rate hike anytime soon. It should be noted that from the last FOMC meeting and now, we have seen a strong jobs data and other economic data out of the US market have been so strong.

The US GDP data will be released on Friday; this is an important data that might actually convince the FED that recovery is now steady. The data is expected to show an economic growth of 2.6%.