How aggressive will the Fed be?

We’re seeing caution in the markets on Wednesday as the Fed kicks off a 24-hour central bank extravaganza. ​ ​

That may be me getting a little carried away but there’s no doubt that the next day or so offers crucial rate announcements from major central banks around the world and only one is expected to resist the urge to change anything. Even the Bank of Japan could be tempted to surprise the markets with a small tweak to its yield curve control policy tool, although that looks very unlikely at this point in time given recent statements.

It’s the Federal Reserve that is the talk of the town today though – as it has been since late July – as traders wait to find out whether the FOMC will opt for another 75 basis point hike or accelerate the process after the inflation setback last month.

Expectations have changed a lot over the summer but last week was a reminder that the path back to 2% won’t be pleasant and central banks may have a much bigger job on their hands than many have allowed themselves to believe. Another super-sized rate hike today and potentially a warning of more may drive that reality home.

Hawkish Fed to send bitcoin below summer lows?

Bitcoin is managing small gains on the day after suffering another setback on Tuesday. It’s slipped back towards the summer low recently and a hawkish Fed could be what pushes it over the edge. We’re seeing some near-term support around $18,250-18,500 but the key test falls around $17,500. A move below here could see it spiral lower once more with support next seen around $16,000.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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