Hawkish Fed policy | 25 Septiembre 2023

25 Septiembre 2023, EUR/USD

Hawkish Fed policy

EURUSD trading plan:

The Fed raised its forecast next year for the U.S. central bank's overnight lending rate to 5.1%, but lifted its outlook for economic growth. The forecasts seem at odds as higher rates raise credit costs that can slow the economy. The two projections do not line up because if higher rates are in restrictive territory, as the Fed indicates, that should lead to a slowdown. Benchmark 10-year yields have surged around 40-basis points, surpassing resistance off the October 2022 highs. The recent breakout raises the question of how high yields will go—an important question that could continue to weigh on risk sentiment.

Investment idea: sell 1.0666 and take profit 1.0598.

David Johnson
Analyst of «FreshForex» company
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