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The FOMC Meeting – Investors Looking for Answers

Mahmoud Alkudsi Mahmoud Alkudsi 13/12/2022
The FOMC Meeting – Investors Looking for Answers The FOMC Meeting – Investors Looking for Answers
The FOMC Meeting – Investors Looking for Answers Mahmoud Alkudsi
What Do we expect from this FOMC Meeting?
 
The FOMC will meet this week to decide on monetary policy and to publish its economic forecasts in terms of GDP growth, inflation, and unemployment levels with the dot plot diagram showing each Fed member’s projections for the US interest rates in the coming years.
 
Investors expect the Fed to slow down its rate hike pace from 75 bp to 50 bp in the December meeting, taking the cash rate from 4.00% to 4.50% due to a significant fall in inflation levels in the last two months.
 
The US core CPI fell from 6.3% in October to 6.0% in November and the CPI headline of November printed its lower read in 2022 at 7.1% indicating that the worse of inflation has likely passed, and while the Fed members will likely welcome the deceleration as the numbers are moving in the correct direction they could maintain their hawkish tone as a weak Dollar will not be helpful in bringing the inflation rate back to its 2% target.
 
It is worth mentioning that the US Treasury Secretary Janet Yellen hoped that high prices would be “short-lived” due to deflationary signs including lower shipping costs and shortened lag time for deliveries.  

 
How Long Does the Fed Policy Need to Stay Tight?
 
Markets and the Federal Reserve are split over how long rates will have to stay high. Despite all the Fed member’s recent hawkish rhetoric, investors have been pricing in the Fed’s tight policy in 2023 up to 5% until the start of Q2 followed by a hike pause and then a possible rate cut of 50 bp before the end of 2023.
Therefore, the US dollar index could fall to sub-100.00 levels and trade even lower in 2023 and this could boost the gold price rally.
 
On the other hand, investors will tune in to the Fed Chair Mr. Powell’s press conference at on Wednesday at 7:30 UK time to get more clarity about the central bank’s future monetary policy.
 

Chart of the Day- Gold Daily Price Chart



On November 10 the Gold price broke above the double bottom neckline located at 1729 and started a bullish momentum creating higher highs with higher lows and eyeing a test of $1848/oz.  
 
Currently, the price trades in the area between 1807 – 1848. Therefore, a daily close above the high end of this area may encourage traders to press toward 1902. However, the resistance level located at 1875 should be considered. On the other hand, a daily close below 1765 may send the price even lower towards 1747 and 1720 respectively.  


 
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

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Meet our contributors
Carl Capolingua
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Carl Capolingua
Market Analyst, Melbourne

Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions. Specialising in Australian and US stock markets in particular, Carl uses a top-down approach to assess the global macro picture before using both technical and fundamental techniques to select stocks. He regularly appears as an expert commentator on a number of media outlets throughout the Asia-Pacific region.
 
 
 

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Lesego Mthombothi
Market Research Analyst, South Africa

Lesego Mthombothi is an experienced market research analyst and investment professional who proudly holds an honours degree in investment management and completed her CFA level 1.
 
 
 

Mahmoud Alkudsi
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Mahmoud Alkudsi
Chief Markets Analyst, MENA

Mahmoud is a market analyst, with over a decade of experience in financial markets. He follows main market movers and tracks their effect on the price chart. Mahmoud mixes technical and fundamental tools with a deeper focus on the technical side, and with his wide experience in providing educational and guidance materials to all levels of traders, he helps them in making informed trading decisions. Before joining ThinkMarkets, Mahmoud was head of market research departments in different reputed financial companies, where he provided market analysis for a variety of asset classes, including FX, equities, indices, and commodity futures. As an experienced market commentator, he was hosted by too many print and broadcast media, including not limited to Sky News Arabia, France 24, Alarabyia, Alsharq-Bloomberg, and CNBC Alarabyia to discuss key risk events their clear impact on the price action. Mahmoud holds a Master of Business Administration (MBA) from Cardiff Metropolitan University of Wales, UK, and speaks Arabic, English, and Spanish.

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Shawn Lee
Market Analyst, Malaysia

Shawn Lee has over eight years of experience in the financial market as a market analyst. Shawn provides market key insights and trade ideas through the market and technical analysis. He also held trader roles and guided traders in maximising one’s trading success.

Carl Capolingua
Carl Capolingua
Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions.
Lesego
Lesego Mthombothi
Lesego Mthombothi is an experienced market research analyst and investment professional who proudly holds an honours degree in investment management and completed her CFA level 1.
Mahmoud Alkudsi
Mahmoud Alkudsi
Mahmoud is a market analyst with over a decade of experience in financial markets. Mahmoud mixes technical and fundamental tools with a deeper focus on the technical side, and has experience in providing guidance to all levels of traders.
Shawn
Shawn Lee
Shawn Lee has over eight years of experience in the financial market as a market analyst. Shawn provides market key insights and trade ideas through the market and technical analysis. He also held trader roles and guided traders in maximising one’s trading success.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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