by Niels Saelens
published on about •
4 read less
published on about •
4 read less
An exciting week awaits investors. Central bankers are coming together in both the United States and the eurozone. The Federal Reserve is expected to pause interest rates, while the European Central Bank (ECB) will raise interest rates again by 25 basis points.
Why is this important?
The central banks started raising interest rates last year in order to bring down the sky-high inflation. That policy is starting to have an effect little by little. Nevertheless, inflation rates are still above the monetary institutions’ targets. Both the ECB and the Fed aim for an inflation rate of 2 percent.US monetary policy outlook: Fed Chairman Jerome Powell and his colleagues meet on June 13 and 14.
- CME’s FedWatch tool shows that 70 percent of the market is counting on an interest rate pause and 30 percent on a 25 basis point hike on June 14.
- The question is: will the Fed surprise investors? Various economic indicators are already putting pressure on the US central bank to follow up on interest rate hikes.
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