Markets price a 30% chance of a 25bps hike, but a hawkish hold may bolster USD support after an initial pullback.
The Federal Open Market Committee is expected to leave the federal funds target range unchanged at 3.50%-3.75% for a fifth consecutive meeting. Fed funds futures currently assign a 30% probability to a 25-basis-point rate increase, though analysts anticipate a steady decision today.
This would mark the fifth straight meeting without a rate adjustment, following a series of aggressive hikes in 2022 and early 2023. Market participants will closely watch the accompanying policy statement and Fed Chair remarks for hawkish signals that could influence USD movements.
While an initial pullback in the USD is possible if the Fed holds rates, a hawkish tone is expected to trigger a quick rebound, reinforcing the currency’s policy-driven support.