Forex Fundamental Analysis – The Fed will ultimately want to realign policy


USDJPY trading plan:

Futures contracts tied to the Federal Reserve’s policy rate showed on Monday that benchmark U.S. interest rates will peak in January 2023, earlier than the February reading they gave last week. Investors widely expect the Fed to raise interest rates by another 75 basis points when it concludes a two-day policy meeting on Wednesday. The September and November meetings, however, showed more than an even chance of moderate 50 basis-point hikes, the futures showed. A scaling back in market bets on when U.S. rates will peak follows weak business activity data on Friday that has raised the specter of recession. The pullback in U.S. rate forecasts is also in line with the decline in inflation expectations. U S. breakeven inflation rates, bond market gauges of investor expectations on the pace of the rise in prices, have declined overall across the curve, from one-year to 30-year maturities since the Fed’s June meeting.

Investment idea: sell 136.98 and take profit 136.41.

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