The Federal Open Market Committee is almost certain to raise rates by 25 basis points to a target range of 2 percent to 2.25 percent when it announces its decision at 2:00 p.m. Eastern Time today. At the same time, the committee will publish the quarterly update to the famous “dot plot” which is likely to bolster expectations for another move in December. Chair Jerome Powell holds a press conference 30 minutes later to discuss the outlook – in plain English – where he is likely to face questions about President Donald Trump’s comments on monetary policy.
Goldman says no
After yesterday’s comment from BP Plc casting doubt on whether crude is heading for $100 a barrel, Goldman Sachs analysts are also pouring cold water on the most bullish predictions. They say that increased production from other OPEC producers and Russia will offset losses from Iranian production, meaning oil will need another catalyst in order to leap to three figures. Speculation is mounting, meanwhile, that Donald Trump may authorize a release from the Strategic Petroleum Reserve in order to cool prices.
Good deal, bad deal
French Finance Minister Bruno Le Maire said that giving a generous Brexit package to the U.K. would be “suicidal” for the European Union as it would show it is possible to exit the EU and keep the advantages of membership. His comments come as Prime Minster Theresa May again ruled out an early election, saying it would not be in the national interest. The main opposition Labour Party’s annual conference continues today, with leader Jeremy Corbyn’s keynote address due this morning.
Overnight, the MSCI AC Asia Pacific Index rose 0.1 percent while Japan’s Topix index closed broadly unchanged after recovering from early session losses. In Europe, the Stoxx 600 Index was flat at 5:45 a.m. as investors awaited the Fed decision and updated forecasts. S&P 500 futures were slightly higher, the 10-year Treasury yield was at 3.089 percent and gold was lower.
Senate Republicans are pushing ahead with a plan to confirm Supreme Court nominee Brett Kavanaugh not long after tomorrow’s hearing where he and Christine Blasey Ford will testify about her sexual assault allegations. Senator Susan Collins, a key swing vote on the committee, said yesterday that she didn’t think Kavanaugh would overturn Roe v. Wade as he respected precedent and the constitution. Whatever the outcome, the fallout from the controversy is likely to harden political divisions ahead of November midterms.