Fed’s decision on interest rates today and tapering. Here’s what to look for … – Finanzaonline.com

Focus on overseas, where he is expected the announcement of monetary policy by the Federal Reserve (Fed) . This evening at 20.00 hours Italian, after two days of meeting, the central bank will publish its decision, as well as its new forecasts for growth, inflation and employment pushing until 2017 for the first time. This will be followed at 20.30, the press conference of the governor Janet Yellen. Appointment important to try to understand a change of tone that would give indications on the future moves of the Fed, in particular on the relative timing of the rise in interest rates.

What to expect analysts

Just the fact that quantitative easing is going towards the end, the question of what will happen next, and in particular on first rise in interest rates has become more pressing among investors. Directions should arrive by the intervention of Yellen, although the forecast for 2017 may be important for understanding how gradual or not the Fed will assume to be the path to economic recovery and therefore the eventual return path of monetary policy accommodative.

“So far you have used the phrase” a considerable period of time “to describe the time following the end of QE and a likely first rate hike, but because we approach the end of the stimulus plan, the Fed need to reformulate the message – says Rob Carnell , an analyst at Ing – will have to give a gradual scaling option in such a way that there are no abrupt changes in the language, and, accordingly, do not mess up markets. ” According to the expert, however, the real problem is that perhaps the market is expecting too much. The expectations may in fact be disappointed: “Probably – says Bart Van Craeynest , chief economist at Petercam IAM – it is still too early to expect clear signals about the timing of the next steps, ie, the first rise in interest rates.” According to Van Craeynest, data on economic activity, credit growth, the labor market and wages, along with others, will be key factors in assessing the likelihood of a change in the monetary policy of the Fed.

What to look specifically

according to MarketWatch , online website of the Wall Street Journal, 8 are the key elements to look carefully at this meeting for guess the next moves of the Fed.

1- Interest rates should remain stationary at 0-0.25%

2-Amount of asset purchases, is expected to fall to $ 15 billion

3-Forward guidance of the Fed and in particular the presence of the phrase “a considerable period of time” regarding the timing of the first rate hike

4- Considerations Fed market work

5- economic forecasts on growth, inflation and employment until 2017

6 -dot plot, the Fed will also release the projections on the evolution of interest rates according to each member of the Monetary Policy Committee. A document, this will be trawled by analysts.

7 – Exit Strategy, the Fed could also provide updates on his principles to be followed for the exit strategy.

8 – Press Conference by Janet Yellen.