Today (29 July) the two-day meeting of the US Federal Reserve will end, followed by a press conference, but no new macroeconomic projections will be published – these will appear every second meeting. The market seems to be counting on the dovish stance from Jerome Powell.
The financial markets seem to be relatively calm today, including the asset classes that have recently been the most volatile, such as gold, silver, and the US dollar. It seems that everyone is waiting for the Fed's decision today at 8:00 p.m. and for 8:30 p.m. for a press conference after the FOMC meeting.
The Fed will set new goals
The Fed may probably not announce any important decisions on Wednesday, change interest rates, or introduce new programs. However, decision-makers may indicate the expected change in the way they see the inflation target this fall or start setting clear unemployment or inflation targets before the Fed considers raising interest rates from the current near-zero level.
According to the minutes of the June Fed meeting, it was the guidelines based on specific targets that seemed to be favored by policymakers. Meanwhile, analysts observing the Federal Reserve believe that these targets will be announced at the September session of the Federal Open Market Committee (FOMC). Until then, it seems that the Federal Reserve may observe how the stimulus programs introduced since March to combat the economic effects of the epidemic are affecting the economy.
The coronavirus is killing, and the US is waiting for another stimulus package
The United States has already come close to 150,000 COVID-19 deaths despite a slowdown in infection in some of the most affected states. China reported 101 new cases, compared to 68 the day before, of which 98 were caused by local infections, mainly in Xinjiang. Anthony Fauci, a leading U.S. expert on infectious diseases, said that waiting for a safe and effective vaccine until December is reasonable, Bloomberg said.
The Americans are still waiting for a new aid package for the economy and households. Originally it was to be introduced last week, then this Monday. Currently, talks between President Trump's representatives and democrats are stuck on Tuesday because of demands from Mitch McConnell, the majority leader in the Senate, that his proposed changes in the liability law be included in the aid package. The epidemic in the U.S., therefore, seems to be continuing, and politicians still do not have a final version of help for the citizens.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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