The US economy looks quite good according to recent reports, with retail sales and the jobs bounce-back standing out. However, risks from Brexit and the usual Chinese scapegoat are always worrying. On this background, the Fed is unlikely to change rates nor hint about a hike in September. It is also important to remember that the US elections are coming, and this could serve to delay a hike once again. Note that the Fed will have the GDP figures, so the tone of the statement could serve as a hint for Friday’s release. A dovish tone to slightly slow the dollar’s rise is our baseline scenario.
Video preview of the Fed decision:
