Analysts at JP Morgan note their expectations from Wednesday’s US Federal Reserve (Fed) monetary policy and its implications for the euro.

Key quotes

“Market was looking for clarification on AIT together with forward guidance, recent Fed speak has suggested that this will now be unlikely.”

“Powell will likely face numerous questions regarding Jackson Hole.”

“The SEP will be closely watched for clues, where the forecast horizon rolls to 2023 and will likely show rates on hold through this period.”

“While the committee will recognise the improvement in domestic data (especially unemployment), Powell will still paint a dovish, uncertain outcome.” 

“Overall, the meeting should be a fairly uneventful one and we remain long euro.”