The Fed is unlikely to raise interest rates on Wednesday, but June is a more likely date. Experts: The Fed will raise the key rate in June June. Parliamentary elections in Great Britain

Following the meeting of the US Federal Reserve, financial market participants, investors and analysts expect an increase in the base interest rate by 25 basis points - from 1% to 1.25% with a probability of 95.8%. Such data was published by Reuters the day before. Previously, Fed officials announced three planned rate hikes in 2017. The first took place at the spring meeting of the regulator: in March, the independent agency increased the rate from 0.5-0.75% to 0.75-1%. For the first time in ten years, the Fed decided to tighten monetary policy in December 2015.

The main signal for the Fed to increase interest rates is macroeconomic statistics. According to the US Department of Labor, the unemployment rate fell to 4.3% year over year in May 2017. At the end of the year, the Fed predicts the value of this indicator at 4.5%. Annual inflation in the United States in May amounted to 2.3% with the monetary authorities’ target of 2%.

As Maxim Shein, chief strategist of the management company BCS, noted in a conversation with RT, the Fed is now purposefully following the plan to raise the rate to 3% by 2019.

“The most important thing for the federal agency now is inflation processes. The Trump administration's efforts to reform the system (including reducing financial regulation and increasing infrastructure spending) will inevitably lead to faster inflation. To keep inflation under control, rates need to be raised early. If the rate is raised at the end of the June meeting, this will mean that inflationary pressure is expected to increase in the United States in the next six months,” RT Shein explained.

Investors are also awaiting statements from Fed Chair Janet Yellen following the meeting. The main intrigue for market participants is whether the regulator is ready to reduce its balance sheet before 2018, that is, before Yellen’s term expires. In 2017, Fed representatives already announced the likely beginning of a reduction in the system’s balance sheet of $4.5 trillion. Perhaps, at the meeting on June 13-14, a strategy for reducing Treasury securities in the Fed’s portfolio of $2.5 trillion and mortgage bonds of $1.8 trillion will be discussed, Bloomberg’s interlocutors note. However, as analysts at Goldman Sachs and Morgan Stanley predict, the Fed will decide to announce a balance sheet reduction before the fall.

Anxious public

The market is expecting an increase in the US Federal Reserve's base interest rate, and if this does not happen, then for the American public this will be a signal of the agency's dissatisfaction with the state of the US economy. This assumption was expressed in a conversation with RT by Gilles Saint-Paul, a professor at the Paris School of Economics.

“As a result of the meeting, it is most likely that a decision will be made to increase the rate, which should lead to an increase in the dollar/euro exchange rate. But the effect will be small, since this decision will be highly expected, it is already reflected in current exchange rates,” Gilles Saint-Paul emphasized.

The rate increase will change the balance of positions in the dollar/euro pair and will lead to some strengthening of the US dollar in the medium term, Mark Thornton, a researcher at the Ludwig von Mises Institute, predicts in a conversation with RT.

“I think that the Fed will raise the rate by 25 points - to 1.25%, which will lead to an increase in the value of the dollar against the euro. Since the beginning of this year, the European currency has been the leader in the dollar/euro pair - from January to May, the euro strengthened against the dollar by 5.4%,” Thornton said.

The day before, amid anticipation of a decision on the Fed interest rate, the dollar showed strengthening against the euro in foreign exchange trading. Thus, the euro dropped to $1.12.

On June 14, the US Federal Reserve System (FRS) decided to increase the base interest rate by 0.25 percentage points. - up to 1-1.25%. Experts note that this decision may moderately reduce investor appetite for ruble assets.

Following a two-day meeting on June 13-14, the leadership of the US Federal Reserve decided to increase the base interest rate by 0.25 percentage points. up to 1-1.25%, according to the regulator’s website. This decision coincided with the expectations of most economists and market participants.

The statement notes moderate growth of the US economy, the inflation estimate (PCE index) for 2017 was reduced - from 1.9% to 1.6%.

The Fed continues to count on another, third rate increase in 2017, the message said. When determining the pace of adjustment of the base rate range in the future, the Fed will focus on labor market indicators, inflationary pressure and inflation expectations, as well as take into account international events, the statement emphasizes.

The communique also reports that the Federal Reserve plans to begin reducing assets on its balance sheet, the level of which reached $4.5 trillion after the stimulus programs. The Fed will reduce the volume of reinvestment of Treasury debt securities and mortgage securities of federal agencies. The reduction in Treasury cuts will be $6 billion per month and will increase by that amount each quarter until it reaches $30 billion per month. For mortgage securities of federal agencies, the reduction in the volume of reinvestment will be $4 billion per month and will increase in the same step every quarter until it reaches $20 billion per month.

Expected rate increase

According to the Bloomberg consensus forecast, out of 100 economists surveyed, 95 expected the key rate to increase by 0.25 percentage points. According to futures data on the CME Group (a group of the Chicago Mercantile Exchange), on the day before the meeting, the probability of a rate increase by 0.25 percentage points. at the June meeting was 93.5%.

“Most investors have long been confident in the tightening of monetary policy by the US Federal Reserve at the June meeting, which means they took this factor into account when making changes to their portfolios,” notes Finam Group analyst Bogdan Zvarich.

Meaningful decision

“When making the decision, the Fed was guided by the achievement of so-called full employment in the labor market,” says BCS FG expert Ivan Kopeikin.

Even following the results of the last meeting (May 2-3), experts pointed to the fact that significant decisions are made at extended meetings with a press conference. And so it happened - at extended meetings in March and June, a decision was made to increase the rate. In 2017, two more extended meetings will be held on September 19-20 and December 12-13.

The US Federal Reserve launched a rate hike policy on December 14, 2015, raising the rate by 0.25 percentage points. A year later, in December 2015, the Fed again raised the rate by 0.25 percentage points. The next increase is 0.25 percentage points. it was in March 2017.

The Fed's influence on the ruble exchange rate

As Igor Dmitriev, head of the Central Bank's monetary policy department, said in an interview with Reuters on June 8, the June Fed rate increase has already been taken into account in the Central Bank's monetary policy. According to him, it is necessary to pay attention to the accompanying comments. The Fed's focus on inflation or the labor market will make clear the Fed's future plans to raise rates, he said.

Experts interviewed by RBC also advise paying attention to the Fed’s comments. As Zvarich notes, as the rate increases, funding in dollars becomes more expensive. As a result, the spread between the cost of funding and the return on Russian assets becomes smaller. Hence the decrease in interest in Russian instruments, the expert explains.

“An increase in the base rate will likely reduce appetite, and accordingly will have a negative impact on Russian assets and the ruble, but the effect will be insignificant, since the decision is already included in prices,” says BCS FG expert Ivan Kopeikin.

A change in the Fed’s rhetoric and market expectations regarding the trajectory of the rate increase may affect the Central Bank’s further steps, says Yakov Yakovlev, senior analyst at ATON Investment Company for macroeconomics and debt markets. According to Zvarich, if the Fed takes a pause in the rate hike cycle until December 2017, the Central Bank will be able to further reduce the rate at upcoming meetings.

“Naturally, an increase in the Fed rate will lead to some pressure on the Russian ruble (which, however, is moderately favorable for exporters and the federal budget), says Sergei Khestanov, macroeconomics adviser to the general director of Otkritie Broker.

Market reaction

American indices reacted to the Fed's decision with a moderate decline. By 21:45 Moscow time, relative to the opening level of today, the S&P 500 index fell by 0.25%, to 2434.1 points, NASDAQ - by 0.53%, to 6188.2 points, the Dow Jones Industrial Average - by 0. 06%, up to 21314.9 points. The DXY index (showing the ratio of the US dollar to a basket of six major currencies - the US's key trading partners) decreased by 0.07%, to 96.9 points.

The decision had a moderately negative impact on the ruble exchange rate. On the MICEX, the ruble exchange rate against the dollar decreased by 0.78%, to 57.42, and against the euro - by 0.98%, to 64.51.

June will be a busy month for important financial news. We are waiting for meetings of the ECB and the Federal Reserve, elections in the UK, the publication of important statistics and the question of Trump's impeachment. The most excitement will occur in the first half of June. Follow the news!

June 8. Speech by James Comey on Trump's ties to Moscow

On Thursday, June 8, former FBI Director James Comey will appear before the US Senate Select Committee on Intelligence. Topic: Russian interference in the 2016 US presidential election.

Not only relations between the United States and the Russian Federation, but also the future fate of the country’s President Donald Trump depend on Comey’s statements. It’s not for nothing that just recently there were headlines in the media about his possible impeachment.

He himself can prevent Comey from making statements that are dangerous to his career. The President has the right to prohibit the disclosure of any information about negotiations between officials. But in this case, the situation may turn out in such a way that Trump will be criticized for hiding the facts. If he bans Comey from speaking before the Senate, then he has something to hide.

Let us recall that it was Trump who fired James Comey from his post as head of the FBI because he refused to stop investigating the future president’s campaign headquarters for connections with Moscow. Because of this, Michael Flynn subsequently had to be fired from his post as national security adviser.

Regardless of how events develop, the markets are extremely tense and are closely monitoring any news that comes out on this issue. The reaction of the dollar exchange rate can be sudden and unexpected.

June 8. Parliamentary elections in Great Britain

Whether the pound will collapse or not will depend on the results of the elections to the UK Parliament. The Labor Party is closing the gap to the leading Constitution Party, which belongs to the current Prime Minister Theresa May.

If Theresa May fails to take a majority of seats in parliament, this will put pressure on the GBP/USD pair and support the growth of EUR/GBP. Labor is committed to rolling out fiscal expansion and will try to promote these ideas in parliament. Theresa May's party sees no need to stimulate the economy.

In addition, the situation with Brexit remains an important issue. The election results will also tell whether the British Prime Minister can continue this path smoothly, bringing a majority to Parliament, or whether new obstacles will arise.

June 8. ECB meeting and QE tapering

More recently, the head of the ECB, Mario Draghi, already reported that the regulator’s leadership does not intend to curtail stimulation in the near future. Now we will have to repeat the same thing following the ECB meeting on June 8.

If markets see a change in rhetoric, this will support the euro. If the rhetoric remains soft, no significant changes are expected in the Forex market.

In general, one can expect hints of a winding down from the results of June 8QEin the medium term. Markets are waiting for the phrase about taking additional stimulus measures if necessary to be removed from the text of the accompanying statement. As soon as the ECB eliminates the possibility of this need, investors will understand that the regulator has taken the path of normalizing monetary policy.

June 14 15:30 Moscow time. Publication of the consumer price index in the USA

Traditionally, the consumer price index in the US is a significant indicator of the state of the US economy, both for the markets and for the Federal Reserve.

At the end of April, the figure was 2.2% y/y, and the core index reached 1.9% y/y. The inflation target is 2% and although the Fed targets a slightly different indicator (final consumption expenditure index - PCE), inflation data is still extremely important.

In recent months, the rate of price growth in the United States has begun to slow down, which is largely due to the fall in world oil prices. If the negative trend continues, it will be perceived negatively by the markets.

The number of Fed interest rate increases in 2017 was mainly related to inflation dynamics. Fiscal stimulus should support price growth, and overall the CPI has been approaching and maintaining its target level for several months.

The weakening of inflationary pressure will force, albeit slightly, to adjust forecasts for further tightening of the Federal Reserve’s monetary policy.

June 14 21:00 Moscow time. US Federal Reserve meeting. What will Yellen say?

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Meetings of the world's central banks throughout the year are an important event for any trader, which helps not only to earn money, but also to assess the economic situation in a particular country. The Central Bank is the main regulator, which is a barometer of the health of the economy. Meetings that take place at different periods every year and the minutes, which are subsequently published, give analysts, investors and simply traders guidelines for the future value of the national currency, as well as prospects for economic management in the current year.

This review provides a calendar of meetings of the world's central banks for the current year 2017, indicating the exact dates of these events.

Meeting of the US Federal Reserve (FOMC) for 2017

The US Federal Reserve (Federal Reserve System) holds a two-day meeting, the result of which is a decision on the interest rate. It is important to note that an active reaction is observed not only when the Central Bank meeting is completed and the decision is published. But even after three weeks, when the minutes of the meeting are published, the so-called “minutes” or Minutes of meeting. The interest rate decision has the greatest impact influence on the dynamics of world exchanges, and the timing

Schedule of the meeting of the US Federal Reserve Monetary Policy Committee,

(Federal reserve Fed)

Bank of England (BoE) meeting for 2017

The Bank of England meets monthly for two days and makes decisions on interest rates and monetary policy. The official protocol is published two weeks after the Central Bank announced its decision. The publication of minutes has as strong an impact on financial markets as the meeting itself. A special feature is that the publication of the minutes of the last meeting is published on the same day as the current meeting. Thus, the protocol data reflects the previous decision made by the Central Bank.

Bank of England meeting schedule,

(Bank of England,BoE)

Meeting of the European Central Bank (ECB) for 2017

The decisions of this regulator, which are made at the meeting, have a strong impact on all European currencies, as well as stock indices in the region. The meeting is held by the Governing Council of the European Central Bank, and it also makes important decisions on monetary policy.

European Central Bank meeting schedule,

(European Central Bank,ECB)

Bank of Japan (BoJ) meeting for 2017

The Bank of Japan is an independent structure from the Ministry of Finance and implements monetary policy in the country by changing the refinancing interest rate. At this rate, commercial banks can subsequently attract and place funds. Throughout the year, the Central Bank holds meetings at which decisions on monetary policy are made. It is characteristic that previously the bank’s governing council held 14 meetings during the year, but in 2016 their number was reduced to eight.

Bank of Japan meeting schedule,

(European Central Bank,ECB)

Meetings of the Swiss National Bank (SNB) for 2017

The Swiss National Bank holds meetings quarterly, followed by a press conference of regulator representatives where the decision on monetary policy is announced.

Meeting schedule of the Swiss National Bank,

(Swiss National Bank, SNB)

Bank of Canada (BOC) meetings for 2017

The meetings of the Bank of Canada (BOC) are conducted by a board of directors consisting of a governor and five deputies, whose purpose is to make decisions on monetary policy.

Bank of Canada meeting schedule,

(Bank of Canada, BOC)

Meetings of the Reserve Bank Board (RBB) for 2017

The Reserve Bank Board of Australia decides on interest rates and regulates the country's monetary policy. Council meetings are held 11 times a year, every first Tuesday of the month except January. As a rule, one of the meetings is held in Melbourne, the remaining 10 in the capital of Australia, Canberra. Minutes of meetings are published two weeks after each meeting of the Bank's Council.

Reserve Bank of Australia Board meeting schedule,

(Reserve Bank Board)

Meetings of the Reserve Bank of New Zealand (RBNZ) in 2016

The Reserve Bank of New Zealand (RBNZ) meets eight times a year to decide on interest rates and future monetary policy. The meeting is held for one day, and the results become known in the evening at 20:00 GMT.

Reserve Bank of New Zealand meeting schedule,

(Reserve Bank of New Zealand, RBNZ)