The Fed's surprisingly aggressive | 18 March 2022

18 March 2022, EUR/USD

The Fed's surprisingly aggressive

EURUSD trading plan:

U.S. interest rates are on a far steeper and faster climb than previously anticipated following the Federal Reserve's liftoff, bringing to an end zero-interest-rate policy. Money markets are signaling that the Fed's surprisingly aggressive posture on inflation will put the brakes on the economy, forcing it to cut rates perhaps as early as the second half of next year. The new "terminal" rate of 2.8% is also higher than the projected "neutral" rate of 2.4%, the level that neither runs the economy too hot nor too cold. This prompted the Eurodollar curve to accelerate the hawkish repricing.

Investment idea: sell 1.1102 and take profit 1.1015.

David Johnson
Analyst of «FreshForex» company
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