FOMC Statement Special Report

The US Fed is scheduled to announce its rate decision today. US Federal may struggle to convince skeptical investors it can tighten monetary policy before the end of the year, after a spate of dismal data on the US, igniting speculation the central bank will wait until 2016 to raise the rates. So we expect the Federal to keep the Funds Rate at (0%) to (0.25%), as it has been since 2008, when it embarked on an effort to support the economy back from a severe recession. The US Federal keeps its target range for the fed funds rate unchanged since December 2008, as the lowest level after reaching an all-time high level at (20%) in March 1980. Amid concerns that recent global economic and financial developments may restrain economic activity and put further downward pressure on inflation. Meanwhile, The minutes showed that most policymakers still thought it would be appropriate to raise rates by the end of the year. Policymakers wanted confirmation from the US economy not weakened and that inflation would gradually return toward the Fed’s (2%) annual target. Nevertheless, some feared that a premature rate hike could harm the Fed’s credibility. So the focus will be on the outlook for US inflation at this evening’s FOMC rate decision and in particular the emphasis they put on deflationary pressures from external factors. Depending on what they say later, this could be the final decision for any chance of a 2015 rate hike.

Meanwhile, The US is getting ready for the scariest levels of Inflation, with the demand on Halloween Candy! Americans are likely to spend billions on Halloween candy, costumes, and other ghostly paraphernalia this year. The rate of Halloween consumer spending on candy is expected to reach ($2.2 billion), almost ($18) per household. It’s defined as the annual change in sub-index of the Consumer Price Index, is poised to rise (4.2%) in October!

However, The last release of Non-Farm Payroll for US was at (142K). This Release reflect the recent negative development at world economies for US job sector. So, the reading below (200K) job created, would put the rate hike into delay. However, still these numbers will be corner stone for FOMC members to assess the American economy, and if it is ready to hike the rate for the first time since 2006. Policy Makers are looking for data to confirm their expectation, so, with this negative release it will have a significant effect on delaying the rate hike compared to any positive reading. Unemployment rate is still at (5.1%), after two consecutive months of lower rate compared to its previous rate. Finally, this is the last reading before December 15-16 meeting!

Job openings fell in August, missing analyst estimates. The openings decreased to (5.4M) in August, according to the JOLTS report, a measure of job openings and labor turnover in the US. Analysts expected the index to come in at (5.63M) in August. That is lower than July’s (5.75M) job openings, a series high. The total number of job openings has increased over the past 12 months.

New US home sales fell to near a one year low in September after two straight months of gains, suggesting a temporary recession in the market for new houses. Whereas sales dropped (11.5%) to a seasonally adjusted annual rate of (468K), the lowest level since November 2014. August’s sales pace was revised down to (529K) from the previously reported (552K) units.