The Fed rate decision is eagerly awaited as it affects the gold and dollar prices. The Fed interest rate is also critical, especially on the cryptocurrency market. While the Bitcoin price is determined according to this decision, the investor’s eyes and ears are in the statement that will come from the USA. The first Fed rate decision of 2023 will be announced on Wednesday, February 1st. The January 2023 Fed interest rate expectation is a prediction for the markets before the decision.
When is the Fed Meeting?
The Fed, which stands for “Federal Reserve System”, is the US Federal Reserve. The Fed meeting is a meeting where the members of the board of directors of the Central Bank come together and provide an opportunity to evaluate issues such as the economic outlook and monetary policy and make decisions.
These meetings are usually held every month and are closely watched by investors, economists and other stakeholders. Decisions from Fed meetings can have significant effects on the US economy and cause volatility in money markets. Moreover, any positive or negative impact on the US economy can have a global impact.
Decisions coming out of Fed meetings may include issues such as interest rates may rise or fall, monetary policy may tighten or loosen. These decisions inform the performance of the US economy and play an important role in determining future economic trends.
The Fed’s January 2023 meeting will be held from January 31 to February 1. After the meeting, the January 2023 interest rate decision will be announced. The first interest rate of the year to be announced will determine the course of the markets. After the decision, Fed Chairman Jerome Powell will make statements.
When and What Time Will the Fed Rate Decision Be Announced?
The Fed’s interest rate decision refers to the interest rates of the US Federal Reserve for a certain period of time. Interest rates are used to control economic growth, control inflation and direct monetary policy.
In addition, interest rates affect economic activities and thus direct individual and business spending, investment and saving money. The Fed rate decision is an economically important decision and affects the price movements and investment opportunities in the markets. So much so that the decision may cause high volatility and increase economic uncertainty compared to market forecasts.
The Fed’s January 2023 interest rate decision will be announced on Wednesday, February 1, at 22:00. Fed Chairman Powell is expected to make statements after the rate decision. Speaking at the press conference after the December rate decision, Powell said, “It seems logical to go to a slower rate hike at the next meeting.” he said.
Fed Rate Expectation: What Happens If Rates Raise?
According to the pricing in the money markets and the statements made by Powell in the previous periods, it is predicted that the Fed will increase interest rates with a 70 percent probability once again, while expectations that the interest rate will decrease still exist. In his statement after the last meeting, Powell stated that he would continue to increase interest rates in line with inflation reduction targets. On the other hand, the January Federal Funds Target Rate expectation is 4.75 percent.
Analysts, on the other hand, evaluated possible clues in the Fed’s meeting minutes. Accordingly, while the clues show that monetary policy uncertainties can help decrease, it is also stated that the evaluations regarding the final interest rate may increase the volatility in the markets.
On the other hand, if the Fed raises interest rates, there is a high probability of an increase in investment demand for the dollar. International investors may be inclined to convert their foreign currency assets into dollars, as the US dollar will offer more interest income.
What Happened to the Fed’s December 2022 Interest Rate Decision?
The Fed increased interest rates by 50 basis points at its last meeting of the year. The Fed, which increased interest rates for the 7th time in a row, increased the policy rate to the range of 4.25-4.50 percent. Stating that the inflation data is still very high, Powell said that the Fed’s decision to increase interest rates by 50 basis points was taken jointly.
Powell stated that interest rate hike decisions will continue to be taken in order to maintain price stability. Announcing that the inflation targets are 2 percent, the Fed Chairman stated that the economy has slowed down significantly in the last period. He also reported that despite the slowdown, unemployment figures are encouraging and the Fed’s inflation forecasts remain partially consistent.
Explaining that inflationary risks are on the upside, Powell stated that the monthly inflation rate has slowed down compared to October and November 2022 until now.