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Market Focus Shifts to US Inflation Data, Fed Decision, and Global Policy Moves

1 week ago

This week, investors are zeroing in on US inflation data and the Federal Reserve’s monetary policy decision, with key UK employment figures on Tuesday also potentially influencing the Bank of England’s next move.

The Federal Reserve is widely expected to maintain current borrowing costs, but uncertainty surrounds officials’ rate projections. A 41% plurality of economists anticipate the Fed’s “dot plot” will indicate two rate cuts, while an equal number predict one or no cuts. Even favorable inflation figures are unlikely to prompt the Fed to act before September.

Investors are also preparing for the Bank of Japan’s policy decision on Friday. The BOJ is expected to discuss reducing bond purchases, with some economists forecasting that the central bank might set the stage for a rate hike next month.

In commodities, oil maintained its largest gain since March, buoyed by anticipation of an OPEC report detailing market outlooks. Meanwhile, gold prices retreated as traders look to the Fed meeting for more guidance on potential shifts toward monetary easing.

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