EUR got down. Overview for 03.11.2022

On Thursday, the market major is depressed; the current quote is 0.9820.

Yesterday the US Federal Reserve System completed its two-day meeting by lifting the interest rate to 4% annual. This is the high since 2008.

The most important comment made right after the decision was announced touched upon the probability of further increases in the interest rate, much higher that previously expected. While previously the average forecast for 2023 was 4.6%, and everyone kept whining that the economy would not withstand it, the current prediction is about 5%.

The Fed is serious about further tightening of the economic policy. It keeps cutting down on assets on balance. In March, the balance was at the high of 8.9 trillion USD; in June it started falling, and now amounts to 8.7 trillion USD. The CB gradually gives up reinvesting money in bonds with expired term of circulation.

The long-term inflation goal is 2%. However, the risks of the economic forecast remain in force.

No one knows whether there will be a recession or the economy will manage to avoid it.

In fact, for now the economy remains afloat thanks to consumer expenses and the real estate sector; here, however, there are some pessimistic forecasts as well. A decline is near.

The US dollar got support after the Fed’s meeting, which is natural: if the economic policy tightening is in force, the dollar is the primary beneficiary.