CENTRAL BANK MANIA CONTINUES
The conclusion of the Federal Reserve’s (Fed) meeting on July 26 will end a busy seven days for central bank watchers that also saw meetings for two other major central banks — the Bank of Japan (BOJ) and the European Central Bank (ECB). The Fed’s policy meeting will end with a prepared statement, but will not feature any new economic projections or a press conference. The excitement seen at the Fed’s last meeting in mid-June, which included a rate hike and additional details regarding balance sheet normalization (see blog from June 14), is unlikely to be repeated, with markets pricing in only a 3% chance of a rate hike at this meeting. However, markets will closely read the Fed’s statement for any hint of the start date for balance sheet normalization and the future path of rate hikes.
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