From TradingView · · 1m 10s
Fed Rate Hike vs Dollar Index
Fed rate hike expected to boost US Dollar Index.
In brief
Fed rate hike expected to boost US Dollar Index. The Fed's anticipated 25 basis point rate hike today will push the US Dollar Index above 100.30 as global capital flows back to higher-yielding US assets. Originally reported by TradingView.
Fed Rate Decision Today
The Fed is expected to hike rates by 25 basis points today, taking the federal funds rate from 3.50-3.75% to 3.75-4.00%.
US Dollar Index Reaction
A rate hike today will likely push the US Dollar Index above 100.30 and trigger a new structural leg higher in the market.
Inflation Drivers
High inflation is driven by oil/energy shocks from the Iran war and Ukraine-linked refinery disruptions in Russia, with core inflation rising 0.3% monthly.
Labor Market Strength
The labor market remains strong with nonfarm payrolls adding 162,000 jobs and unemployment steady at 4.1% in August.
Fed Independence
Fed Chair Warsh has repeatedly stated Trump has had no impact on his decisions, and will likely defy Trump's public demands for rate cuts.
Market Implications
Global capital is expected to rush back into higher-yielding US assets as the Fed moves in the opposite direction of other central banks.
Here's the gist
The Fed's anticipated 25 basis point rate hike today will push the US Dollar Index above 100.30 as global capital flows back to higher-yielding US assets.
