FOMC Dovish on Balance Today?


The Fed’s two-day meeting concludes today with a policy statement at 1:00 p.m. and Powell’s press conference at 1:30 p.m. Financial futures markets are predicting there is a 98% probability that the FOMC will maintain its fed funds target rate at zero to 25 basis points.

The FOMC will likely elaborate on its recently announced “average inflation targeting” framework. The Fed’s policy suggests it will seek inflation exceeding 2.0% for a period of time to offset recent inflation undershoots.

Fed Chair Powell is likely to speak about the need for Congress to provide more fiscal stimulus. In addition, Mr. Powell and may open the door to shifting the emphasis to asset purchases.

Interest rate market futures at the short end of the curve are likely to be supported by ideas that major central banks, including the Federal Reserve, will keep short term interest rates low for an extended period. Some analysts believe it will be several years before the Federal Reserve will be in a position to hike its fed funds rate.

However, futures at the long end of the curve, especially the 30-year Treasury bond futures may be undermined by the inflationary aspects of the Federal Reserve’s “average inflation targeting” policy.


U.S. stock index futures are higher, as traders await the conclusion of the Federal Reserve’s two-day monetary policy meeting.
In addition, there is renewed optimism for a bipartisan economic stimulus package.
August retail sales increased 0.6% when a gain of 1.0% was expected.
There are three 9:00 central time reports. The September housing market index is anticipated to be 78 and the July business inventories report is estimated to show a 0.1% increase. The Atlanta Fed’s Business Inflation Expectations last month was 1.7%.
I am expecting the statement from the Federal Open Market Committee today will be dovish on balance.


The U.S. dollar index is lower, and the euro currency is higher, as traders expect a dovish on balance statement from the FOMC.
The British pound advanced on news that U.K. inflation fell in August to its lowest level for nearly five years but was above expectations.
The Bank of England will hold its policy meeting tomorrow. No change in interest rate policies is expected. Traders will focus on the statement.

Click here for full report

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.