INTEREST RATES AND CURRENCIES: The Fed hinted at interest rate hikes – The interest rate market is looking for a direction

Government bond interest rates moved in different directions on Thursday as investors melted Kevin Warshin the decisions of the first meeting after he started as chairman of the US central bank Fed.

The central bank decided on Wednesday evening Finnish time to keep the key interest rate in the range of 3.50–3.75 percent, as expected. However, the central bank hinted at possible interest rate hikes and the statements were considered hawkish in the market.

“Even at the previous meeting, the Fed’s statement was leaning more in the direction of interest rate cuts. Now, when you look at the interest rate paths drawn by the Fed, the forecast was already a little bit in the direction of higher interest rates. The Open Market Committee is still very divided, but the meeting increased expectations that the next move would be upwards, and in the extreme case it could come as early as autumn”. Nordic chief analyst Jan von Gerich Kauppalehti assessed the situation on Thursday morning Economic morning.

“At the October meeting, the first withdrawal is already fully in the prices,” he added.

The interest rate on the US ten-year government bond was about four percentage points lower at 4.439 percent. The interest rate on the country’s two-year loan was approximately at the level of the previous day’s closing price at 4.183 percent.

In Europe, interest rates were slightly rising. In Germany, the interest rate on the ten-year government bond increased by about one percentage point to 2.928 percent, and the two-year interest rate increased by three percentage points to 2.613 percent.

Oil taps open

The United States and Iran have signed a preliminary peace agreement on Thursday and will begin a ceasefire lasting at least 60 days. During this time, Iran has confirmed that the Strait of Hormuz remains open and ships can pass through it free of charge.

The price of Brent reference oil was down about one percent at $78 per barrel.

In the past week, in addition to the Fed, several other central banks have also held their interest rate meetings. On Thursday, the Bank of England kept its key interest rate unchanged at 3.75 percent. The decision was widely expected in the market.

In the Nordic countries, on the other hand, the Norwegian central bank decided earlier in the day to keep its interest rate at the current 4.25 percent, and the Swedish central bank on Wednesday at the current 1.75 percent.

On the foreign exchange market, the dollar’s course had strengthened slightly in relation to other key currencies. At the time of review, one euro was worth 1.1466 dollars, 186.51 yen, 0.8665 pounds and 10.970 Swedish kronor. One dollar equals 160.91 yen and 0.7557 pounds.