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Signal about the fall of the dollar

Eight months after raising interest rates to the highest in two decades, Federal Reserve Chairman Jerome Powell and his colleagues are nearing the end of their fight against inflation.

In testimony before Congress last week, Powell stressed that the central bank needed “a little more evidence” that inflation was moving toward its 2% target before cutting borrowing costs.

The Fed is expected to hold interest rates steady for a fifth straight meeting when policymakers meet March 19-20. Investors’ focus will be on the Federal Open Market Committee’s quarterly rate forecasts, including whether new employment and inflation data prompted any changes. At its upcoming meeting, the Fed will also begin an in-depth discussion of the ongoing contraction of its $7.5 trillion balance sheet, a process known as quantitative tightening. No decision is expected regarding a possible reduction or slowdown in asset outflows, although Powell may use his press conference to comment on the progress of those negotiations.