Fed: Significant increase in the projections of rates peak to support USD – Commerzbank

The Fed rate decision on Wednesday is being watched very carefully. In the opinion of economists at Commerzbank, the US dollar is set to strengthen if the expected peak in rates is increased. 

Where do board members expect rates to peak?

“The market is still indecisive as to whether the Fed will deliver 75 bps or 100 bps, but what is clear is that the Fed projections of June for the key rate are definitely too low.” 

“The big question is where do board members expect rates to peak? A significant increase in the projections would support USD, otherwise, the greenback will benefit only moderately from the rate decision.”