The Fed is comfortable pausing | 05 10月 2022

05 10月 2022, GBP/USD

The Fed is comfortable pausing

GBPUSD trading plan:

Traders suffering through a bruising year for markets are hoping that recent signs of wobbling economic growth will force the Federal Reserve and other global central banks to take their foot off the gas in the fight against inflation. The moves come as investors reprice expectations of how high the Fed will raise rates in its battle to crush inflation amid recent signs that growth in the U.S. may finally be slowing. Investors in the futures markets now expect the fed fund rate to peak at 4.5% next year, compared to the expected peak of about 4.7% they were pricing in last week. Markets have rallied on the hopes of a Fed pivot several times this year only to reverse and crumble to fresh lows, making investors wary of the current bounce. This time around, a series of weaker-than-expected data on manufacturing and job openings in the United States are among the factors fueling hopes that weakening growth will push the Fed to slow its market-punishing rate hikes.

Investment idea: buy 1.1413 and take profit 1.1500.

David Johnson
Analyst of «FreshForex» company
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