- FED’s first meeting of 2021
- Senate short of votes to impeach Trump
- ‘’Brexit deal may not be enough to protect Britain from economic effects’’
FED’s First Meeting of 2021
The data to be followed in the markets today are as follows:
22.00 USA, Fed’s interest rate decision
22.30 USA, Jerome Powell’s press conference
Today, the Federal Open Market Committee (FOMC) will hold its first meeting of the year. The Fed’s decision on monetary policy will be closely monitored by investors. FOMC is widely expected to leave monetary policy unchanged at this meeting. Following a mixed course yesterday, global markets focused on the decisions of the US Federal Reserve (Fed) and the statements of Fed Chairman Jerome Powell.
Stating that the Fed is not expected to change interest rates and that the emphasis on inflation and employment can be continued in verbal guidance, analysts said that there will be clues regarding future policies in Powell’s statements.
Global stock markets were mixed ahead of the FOMC’s January meeting. The dollar rose against major market coins. Asian stocks fluctuated in Wednesday’s trading, recording the steepest decline in two months as investors awaited the outcome of the Fed policy meeting evaluated balance sheet statements. The dollar rose against major currencies.
Japan and Australia shares climbed. Nasdaq 100 Index futures were higher after Microsoft Corp.’s fiscal second-quarter sales rose faster than analyst expectations. S&P 500 and European futures declined. The S&P 500 Index, which fluctuated between the ups and downs, closed Tuesday with a limited decline.
US Treasury bond yields did not change much. While oil prices rose, Bitcoin fell below the $ 32,000 level.
Investors are also seeking more clarity on the timing of US President Joe Biden’s $ 1.9 trillion Covid-19 support plan.
What to Expect from the Meeting?
As a result of the FOMC, which will end at 22:00, the FED is not expected to make any changes in the interest rate or asset purchases. The market will focus more on the press conference to be held by Powell at 22:30 in this meeting rather than the decisions. Powell, probably will try to convince them that it is too early to talk about reducing markets’, assets’ purchases, and the FED as long as necessary will continue to support the economy until permanent inflation occurs on it. In Dollar, if Powell can persuade, a downward movement can be seen. Powell will be asked for his views on the $ 1.9 trillion aid package. Whether the package needs to be this large and indirectly, questions may arise about the impact of asset purchases on the time to start to reduce. There may be questions about Powell, whose term expires in the first quarter of 2022, about whether he will want to continue his duty. According to the surveys Biden is most likely expected to propose Powell to continue his duty.
Senate Short of Votes to Impeach Trump
All but five Senate Republicans voted in favor of an effort to dismiss Donald Trump’s historic second impeachment trial on Tuesday, making clear a conviction of the former president for “incitement of insurrection” after the deadly Capitol siege on Jan. 6 is unlikely.
The US Senate will not have enough votes to declare impeachment against former US President Donald Trump. The upper house of Congress appears to be short of 17 votes, according to The Hill.
So, Republican Rand Paul on January 26 initiated a vote in the Senate, during which he proposed to recognize the impeachment process of Trump as unconstitutional. He was supported by 45 Republicans. At the same time, five more were on the side of the Democrats on this issue. During the vote, Republicans Mitt Romney, Ben Sass, Susan Collins, Lisa Murkowski, and Pat Toomey joined the Democrats.
In the US Senate there are now 50 representatives of the Republican parties, 48 – of the Democratic, 2 – positioning themselves as independent. In total – 100 deputies. It would take two-thirds of senators — 67 votes — to attain a conviction, meaning 17 Republicans would have to cross party lines to side with Democrats in finding him guilty.
At the same time, the Axios portal, citing informed sources, reports that senators are discussing a resolution to censure Trump.
Some Democrats have expressed interest in a resolution censuring Trump on condition that at least 10 GOP senators publicly endorse it, thus securing the 60-vote majority needed to pass the resolution in the Senate, interlocutors said.
It is noted that it is still unclear whether this resolution will be adopted instead of the Trump impeachment trial or after it.
The day before, it was reported that a resolution to impeach Trump had been submitted to the Senate. US President Joe Biden doubted that the impeachment process against former leader Donald Trump would be successful.
The Senate of the US Congress postponed the consideration of the impeachment of the 45th President Donald Trump until February 9, the decision was adopted unanimously. We add that Trump has already hired a lawyer for the impeachment procedure.
“Brexit Deal May not be Enough to Protect Britain from Economic Effects“
Moody’s reported that although the trade agreement has been signed between the UK and the European Union (EU), leaving the EU membership will have macroeconomic costs on the British economy.
In the statement made by the international credit rating agency Moody’s, it was stated that the agreement signed by the UK with the EU may not adequately protect the country against the economic effects of leaving the Union, while the economic contribution of the obtained audit power is uncertain.
“The agreement reached between the UK and the European Union confirms the macro-economic cost of Britain’s loss of EU membership,” the statement said.
It was emphasized that the trade agreement between the UK and the EU seems more in favor of the EU and that serious new obstacles have been created in some areas of bilateral trade.
In the statement, it was stated that Britain’s “service” sector could be adversely affected as it is not covered by the trade agreement in question.
Moody’s Analyst Benedicte Andries, who was quoted in the statement, said, “While the concluded Brexit agreement prevents the realization of the no-deal separation scenario, it does not include areas such as the service sector that are extremely vital to the British economy. So the British economy will be significantly smaller in the long run.’’
About 80 percent of the British economy is the “service” sector. Britain and the EU are aiming to sign a memorandum of understanding in March that will also include the service sector.
In addition, The UK is no longer part of the single EU VAT area, which means the sales tax is now collected by each country. The Federation of Small Businesses (FSB) said its members are facing “significant issues” as a result of leaving the EU VAT area. “Businesses just did not have enough time to prepare for this,” said Selwyn Stein, managing director of VAT IT. “They’re being hit by a rulebook from 27 separate countries when they are used to dealing with the EU as a single bloc.
“They are calling us in a panic because their goods have been stopped and they don’t know what to do,” he said. “They have become fearful about trading so are stopping shipments until they have a resolution.”