USD: rate rise time?

America boom

This is it. Never mind the threat of global war with Russia kicking off in Europe, markets sense a rate rise of 0.25% from the FOMC (Wednesday 21st 6pm GMT) and everyone has an opinion about it.

Expect massive volatility as things go wild during the Press Conference (Wednesday 21st 6.30pm GMT) as Jerome Powell faces the press. No matter what he does, raise rates or leave them be, the stock, currency and commodities markets want to know why.

Trump is slapping trade tariffs on countries like parking tickets, threatening trade wars with every continent that could knock the domestic economy for six. China is the latest in the firing line and we can’t see that ending well.

It’s got to be said that GDP is coming in close to Trump’s 3% target and his Twitter feed shows his usual modesty around that. Of course, stock market gains and recent improvements in small business confidence are largely powered by his much-touted Tax Cuts and Jobs Act slashing business rates from 35% to 21%, rather than actual growth, but some argue his policies are actually leading to massive debt. The sums don’t add up, depending on who you’re asking.

So, long story short, Powell is in a very hot seat and needs to steer the Reserve Bank’s fiscal policy to help calm the economic waters. Plan your in and out points and enjoy the USD ride this week.