Second guessing the US Federal Reserve
Global markets will be waiting in anticipation for the outcome of the Federal Reserve Open Market Committee (FOMC) meeting this week. During recent trading sessions the US government bond market has begun to discount more hawkish language in the statement after the meeting, with expectations moving more in favour of the Fed signaling it is minded to increasing interest rates earlier than previously thought. The priced probability in the market of a rate increase by July next year has increased from 53 per cent, to 61 per cent during the last 10 days. Also, the Fed governors will be updating their view on the likely path of interest rates out to 2017.