SUPER WEDNESDAY
The D-Day has arrived: this Wednesday (7), the Federal Open Market Committee (FOMC) announces the future of interest rates in the United States.
The expectation is that the Federal Reserve will announce another maintenance of the interest rate, which stands at 4.25% and 4.25%. This decision is not a surprise, as the leaders of the monetary authority have indicated that the current economic scenario requires caution.
It is the next steps of the Fed that intrigue investors. On one hand, the U.S. central bank is concerned about the effects of tariffs imposed by Donald Trump on imported products on inflation and job creation.
On the other hand, Jerome Powell has been “fried” by Trump and is being pressured by the White House for a faster monetary easing.
The CME FedWatch monitoring tool signals that the market is divided: 68% bet on a maintenance of interest rates in the June meeting, while 31.1% project a decrease of 0.25 percentage points. Another 0.9% expect a larger reduction of 0.50 pp.
The Fed chairman has a press conference scheduled for the afternoon, right after the announcement of the monetary decision.
The market is also reacting to the news that the U.S. and China will begin negotiations in search of a trade agreement. In April, the two countries escalated a trade war with increased tariffs on imported products — 145% imposed by the U.S. and 125% by China.
The U.S. Treasury Secretary, Scott Bessent, and the chief trade negotiator, Jamieson Greer, will meet with China's top economic authority in Switzerland on Saturday (10).
However, Bessent has already emphasized that this first conversation will focus on reducing trade tensions between the two countries, and that a major agreement should not be expected.
Asian markets closed higher. The European market is operating in the negative, while Wall Street futures are rising this morning. Cryptocurrencies are in positive territory and oil is advancing.
