Investors look ambiguous over Fed policy

Inflation in the United States is still stubborn despite the case of the declining trend for the past few months. Therefore, the Federal Reserve (Fed) is expected to continue its policy-tightening cycle to bring down inflationary pressures to the desired levels. However, fresh evidence of banking sector shakedown has alarmed that the United States economy could face a deep recession. Higher inflationary pressures would join hands with the banking sector fiasco, which would impact the scales of economic activities dramatically.

Apart from the interest rate policy, Federal Reserve chair Jerome Powell would also deliver the dot plot plan, a roadmap dictating further rate hikes to achieve price stability. The Federal Reserve is still sticking to its prior terminal rate projection of around 5.25%, therefore, no surprises are expected for the interest rate guidance.