The Fed could raise interest rates today and crypto could still rally. That sounds contradictory, but markets react to surprises. If investors already expect a hike, the bigger question is how many more increases might follow.
As of September 15, CME put the chance of a quarter-point hike at around 92%. That would take the Fed’s target range to 3.75%–4.00%. My focus is whether today’s expected hike will be a one-off or the start of more rate rises. (CME Group)
When to watch
The decision and economic forecasts arrive at 2pm Eastern Time (7pm BST), followed by Kevin Warsh’s press conference at 2.30pm Eastern Time (7.30pm BST). Both matter: his answers can change how investors interpret the announcement. (Federal Reserve)
What the latest spending figures tell us
Today’s retail-sales figures showed US retail and food-service spending rose 1.2% in August after falling 0.5% in July. Consumers are still spending, giving the Fed more room to focus on inflation. That makes an urgent rate cut harder to justify. Some of the increase may reflect higher prices rather than people buying more. (US Census Bureau)