Global markets await Fed’s interest rate decision

Global markets are following a mixed course ahead of the monetary policy decisions that the US Central Bank (Fed) will announce today. “The possibility that the Fed may move to soften its policies later”, which increased when macroeconomic data released yesterday in the US pointed to a strong labor market, complicates pricing.

While the bank is certain to raise interest rates by 75 basis points at today’s meeting, Fed Chairman Jerome Powell’s verbal guidance is of great importance for the coming period.

75 BASIS POINT INCREASE

Yesterday, the difference between the US 10-year bond interest rate and the 3-month treasury bond yield stabilized at minus 6 basis points after it decelerated to minus 20 basis points.

In the Fed’s studies, this situation indicates that the country’s economy may decelerate, while the widening of the gap between the two assets strengthens the risk of recession.

While there is uncertainty in pricing in money markets regarding the monetary policy steps that the Fed will take in December, it is predicted that the bank will raise interest rates by 75 basis points with a probability of 49 percent.