Fed dot-chart in focus at upcoming monetary policy meeting - FXStreet

FXStreet (Łódź) - Adam Narczewski, Deputy Regional Director and market analyst at XTB Poland believes that the highlight of the FOMC monetary policy meeting on Wednesday will be the presentation of the dot chart.

Key quotes

"In June, the consensus was that the main interest rate will be at 1.00%-1.25% at the end of 2015 (which we assume 3-4 hikes)."

"The market has already discounted such scenario, hence the appreciating dollar."

"That is why we should see a concentration of dots at the 1.25% level."

"The scenario for 2016 is not clear yet but we can assume another 2.5% which means 5-6 interest rate hikes."

"The most important will be the last column of the chart (the longer expectations)."

"The consensus dropped from 4% to 3.75% in March but recent inflation readings (higher than expected) should move the forecast back to 4%."

"If that happens, yields on 10y bonds should increase and stock markets will experience a corrective movement."