Betting on Monetary Rates: Can Central Banks Surprise the Market?

Betting on Monetary Rates: Can Central Banks Surprise the Market?The base scenario is unlikely to change: the Fed and the ECB will once again raise interest rates, and BOJ will not risk changing anything. But what is much more important for the market is not the official decision, but the subsequent rhetoric of the main characters: Jerome Powell, Christine Lagarde and Kazuo Ueda.The head of the Fed is likely to repeat the old theme We are watching the data and, if anything, we will intervene. For the dollar, this scenario will be positive, but not for American businesses. The number of corporate defaults in the US this year has already exceeded the figures for 2022. So we are waiting for problems not only in the stock market but also in the debt market. The option that Powell will dare to declare a stop to further rate hikes is unlikely.According to Eurostat, core inflation in the Eurozone rose to 5.5% (y/y) in June against the forecasted 5.4%. So Europe does not even dream of the declared target level of 2%. Some figures from the ECB have hinted that the next (after the current meeting) rate hike is highly undesirable: no one is going to push the European economy into recession. But let's see how fabulous Lady Christine's performance will be.The situation in Japan is more complicated. The country's problem is not so much inflation, but the steep fall of the yen. Currency interventions can only help in the short term  sooner or later the regulator will have to raise the rate. Japanese analysts are confident that the BOJ will revise its inflation forecasts upwards.Probably, the government expects to save the yen with the help of BOJ monetary adjustments, which does not exclude aggressive debates and harsh language at the current meeting. But, given the debt burden of 230-240% of GDP, the revision of monetary policy will jeopardize Japan's financial stability. The maximum that we can see is a refusal to control the yield curve.So, we listen carefully and do not risk in vain.Profits to yall!#ForexChief #market #forexnews #stocks #worldnews #profit #StockMarket #ecb #token #Eurozone