The corrosive outbreak of inflation | 21 Septiembre 2022

21 Septiembre 2022, GBP/USD

The corrosive outbreak of inflation

GBPUSD trading plan:

The Federal Reserve is expected to lift interest rates by three-quarters of a percentage point for a third straight time and signal how much further and how fast borrowing costs may need to rise to tame a potentially corrosive outbreak of inflation. While investors largely expect the Fed to lift its policy rate by 75 basis points to the 3.00%-3.25% range, markets could be unsettled by the updated quarterly economic projections that will be released along with the policy statement. Those projections will show where Fed policymakers think interest rates are heading, how long it will take inflation to fall, and how much "pain" is likely to be inflicted on U.S. employment and economic growth along the way. U.S. central bank to eventually need to raise its policy rate to around 5.00%, a level approaching the peak of 5.25% seen from mid-2006 to 2007 when Fed policymakers were concerned about a bubble in the U.S. housing market, and one that could amplify stress across the global financial system.

Investment idea: sell 1.1359 and take profit 1.1279.

David Johnson
Analyst of «FreshForex» company
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