The much anticipated United States Federal Reserve meeting happened on Wednesday. Contrary to market expectations, the Fed hiked the interest rates by +25 basis points. Despite a weakening inflation, the Fed kept the rate forecasts unchanged and promised one more additional hike for this year. The Fed’s monetary policy statement stated that the inflation targets might not be reached in the near term and the target rate of 2 percent will soon be achieved in the time ahead.

Fed’s officials forecast a 2 percent inflation target in 2018 and 2019. The central bank also provided details on the Fed’s plan of trimming the enormous $4.5 trillion balance sheet by a way of slowly selling the bonds later this year. Due to this, the dollar began to rise slowly. The trading markets remain confused about the interest rate expectations of the Federal Reserve and show a high volatility. From a trading standpoint, we expect the dollar to get strengthened in the days to come.

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The information and views expressed herein are NoaFX’s opinion about the market and no responsibility (or liability) is accepted for any factual errors or trading decisions made by traders based on this opinion. The contributor might be involved in trading or hold some positions in the market and accepts no liability arising out of the above information.

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