The big day has finally arrived and investors are seemingly in quite an upbeat mood going into the Fed interest rate decision.

The inflation data on Tuesday appears to have settled any remaining Fed nerves with markets now pricing in more than a 90% chance that the central bank leaves rates unchanged.

That seems a little overconfident given the data as a whole still paints quite a resilient and stubborn picture which could result in markets being caught out by a final hike, especially following recent BoC and RBA moves, but the Fed can still do so in July and that looks more likely at this stage.

Ultimately, a hold tonight may simply allow for more data to justify such a decision before the Fed acknowledges in July that the tightening cycle has likely finished. At which point the obsession will turn to the timing of the pivot, but again that’s getting a little ahead of ourselves. The FOMC will be determined not to pivot too early and may rather leave it a little late instead.

Bitcoin holding up well but enthusiasm running thin

Bitcoin is trading a little higher on the day but continues to languish around its recent lows. It has broadly held up quite well in light of recent events involving the SEC but perhaps enthusiasm towards crypto more generally is running a little thin and could be weighing.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.

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• Source: https://www.marketpulse.com/news-events/central-banks/all-eyes-on-the-fed-bitcoin-struggling/cerlam