The Federal Reserve will dominate the conversation for investors this week. The Federal Reserve and the Bank of England are expected to raise interest rates at their meetings and there is a chance the Swiss National Bank will do the same.
The central bank’s latest policy meeting will be held on Tuesday and Wednesday, June 14-15, with the Fed expected to announce at least another 0.50% increase in its benchmark interest rate on Wednesday afternoon.
Wednesday’s 21.00 GMT+3 policy announcement will be followed by a press conference with Fed chair Jerome Powell at 21:30 GMT+3. The Fed will also release its latest summary of economic projections on Wednesday, offering officials’ forecasts for GDP growth, inflation, and future rate hikes.
Following last Friday’s data on inflation, investors are now bracing for the potential of more aggressive interest rate increases from the Fed, perhaps as soon as this week.
The Bank of Japan (BoJ) has so far resisted pressure to tighten policy, weakening the country’s currency. The policy divergence has sent the yen down more than 15% against the dollar since early March.
The yen fell as much as 0.6% on the day to 135.22 yen per dollar, its lowest since 1998. It was last broadly flat at 134.37 yen per dollar.
Things grew tense between China and the U.S. after Defence Secretary Lloyd Austin said on Saturday at the Shangri-La Dialogue in Singapore that while U.S. “policy hasn’t changed,” China has continued to issue a “steady increase in provocative and destabilizing military activity near Taiwan.” Austin said that “Indo-Pacific countries shouldn’t face political intimidation, economic coercion or harassment by maritime militias.”
In other news, Bitcoin dropped below $24,000 on Monday as the wider cryptocurrency market continues to fall.
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