The Fed vs Inflation

 

Jerome Powell. Carolyn Kaster / AP  

 

"The Fed will be clear - more tightening may happen"  

 

Experts agree that the Fed will give a wait-and-see impression on Wednesday when talking about the upcoming autumn announcement.  

 

Oanda's market analyst Edward Moya predicts that while the Fed will announce a break in September, they will be clear that more tightening "could very well happen", writes AFP. 

 

"Powell will signal that further rate hikes are not out of the question, but the Fed will take a more cautious approach," writes Ryan Sweet, chief economist at Oxford Economics

 

The key question, according to macro strategist Steve Englander, is whether the Fed places more emphasis on the fact that inflation has come in weaker than expected - that economic activity has been stronger, writes Reuters.

 

Tomas Oneborg/SvD/TT  

 

The Fed announcement could hit mortgage borrowers hard  

 

A 25 basis point hike from the Fed tonight is clearly priced into the market. Also that there will be another increase this autumn. Should the Federal Reserve unexpectedly push for more than that, it could put pressure on the Riksbank and the ECB – and thus Swedish wallets, says Danske Bank's chief economist Michael Grahn.  

 

- In the long run, you can say that it will be more difficult for Swedish mortgage borrowers because it will put upward pressure on Swedish short-term interest rates if the American central bank surprises negatively, he tells TT. "Is there a certain divergence - think the focus will be on that" TT