The FOMC is scheduled to announce its decision at 3:00 a.m. Japan time on 17 September, with the focus of this decision on whether to deliver a 0.25% rate hike and on revisions to the dot plot. Chair Warsh's press conference will begin at 3:30 a.m., with the Summary of Economic Projections (SEP) and the path of additional rate hikes also in focus.
The Federal Open Market Committee (FOMC) is scheduled to announce its decision at 3:00 a.m. Japan time on 17 September, along with revisions to the SEP and dot plot. Market pricing implies roughly a 92% probability of a rate hike this time, which, if implemented, is expected to mark a turning point after roughly 3 years.
In addition to whether rates are raised, the key focus will be the path of additional rate hikes indicated by the dot plot and Chair Warsh's outlook for the future at the press conference. At the previous meeting in July, 3 regional Fed bank presidents voted against the decision in support of a rate hike, leaving the committee extremely closely divided.
Around the announcement, the market is expected to see a tug-of-war between dollar strength and yen strength. With the BOJ meeting decision also due on 18 September, US and Japanese interest-rate developments will overlap, and market moves are expected to become nervous during a week when both are in focus. Depending on the decision, price movements are likely to be driven by the three-part combination of the statement, dot plot and press conference.
Open orders remain broadly balanced between buying and selling, but walls have formed around the ¥155 level. Depending on positioning imbalances, the direction of upside moves could change. USD/JPY and gold are expected to react sensitively to the FOMC decision and the tone of the press conference.