Markets on edge as US Fed meets to tackle high inflation - afp.com

The Federal Reserve is meeting this week with inflation still running well above its long-term target, a backdrop that has kept global markets cautious. Investors are watching less for a change in the policy rate itself than for the tone of the statement and any shift in how officials describe the balance of risks.

The central question is how firmly policymakers intend to keep restraining demand while price pressures ease only gradually. Rate decisions work through the economy with a lag, so markets tend to react to signals about the path ahead rather than to any single meeting's outcome. That is why the wording of the statement, the updated projections and the chair's press conference often matter more than the headline decision.

For observers, the practical takeaway is that uncertainty around the policy path remains the dominant driver of asset prices. Attention will focus on whether officials acknowledge progress on inflation without signalling an early pivot, and on how bond yields and the dollar respond.