Federal Reserve Statement to Offer Key Economic Forecast

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Principal Points

• Fed Chairman Jerome Powell will conclude a two-day FOMC meeting with a key statement
• Investors expect to hear the Fed’s plans on tapering the vast monetary support

Federal Reserve Press Conference to Provide Updates

The US Federal Reserve has the tough task to assuage increased investor fears in times of elevated uncertainties. Concluding a two-day policy meeting today, Federal Reserve Chairman Jerome Powell will hold a press conference.

Following the Monday market selloff globally, the Fed Chair will need to be convincing in his attempt to portray an optimistic outlook for the US economy. An upbeat forecast for the world’s largest economy is needed so that the US central bank could start unwinding its easy-money policies.

Today, the Federal Reserve is set to release its economic outlook and forward guidance, including interest rate forecasts. Traders and investors will closely scrutinize the statement and the follow-up press conference. They expect to receive crucial insights into the potential framework of tapering the asset program.

Since the beginning of the pandemic in March 2020, the US central bank has been buying assets worth $120bn every month. Fed officials decided on the extraordinary measure in efforts to sustain the economy and to provide more opportunities for jobs, business activity, and consumer spending.

Market Movers on Wednesday

The speech by Fed Chair Powell could hold important information that has the potential to shake up the financial markets. Investors will keep an eye on the movement of the US dollar, as a highly liquid financial asset. In addition, gold and silver might be on the move due to their safe-haven characteristics.

Moreover, US index futures point to a higher open of the regular session today. Market participants might rush to buy the dip, expecting reassuring news from Mr. Powell. Dow futures in pre-market trading on Wednesday indicated a move up by about 150 points to 200 points. S&P500 futures were higher by 0.4%, and Nasdaq futures were up about 0.3%.

Looking back, Tuesday’s session finished in mixed territory as the market couldn’t ignite a rebound from Monday’s decline. The Dow finished moderately lower by 50 points, followed by the S&P500, down about 3 points. The Nasdaq Composite eked out a modest gain of roughly 33 points.

Bitcoin on Pace to Snap a Three-Day Losing Stretch

Bitcoin is pushing higher today, aiming to snap its three-day losing streak. The leading coin dropped below $40,000 earlier in the day, for the first time in six weeks. However, buyers were quick to act and the dip was bought shortly after. Presently, bitcoin is trading near $42,500 per coin.

European markets advance for a second day after yesterday’s broad upside swing. The pan-continental Stoxx Europe 600 jumped 1% in the early hours of the session. Momentum faded a bit and the region-wide benchmark traded higher by half a percent.