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This week's biggest market movers are central banks: FXTM

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(Kitco News) Central banks "take centre stage this week," writes FXTM chief market strategist Hussein Sayed. “The Federal Reserve, Bank of England and Bank of Japan [are] all due to announce policy decisions. Out of the three meetings, the Fed is likely to be the most watched following its historic shift towards average inflation targeting. The big question remains how will the FOMC put this policy into action?” The Fed has already signaled that it is looking to keep rates near zero for several years to come. Th key thing to watch during Wednesday’s announcement is the dot plot, adds Sayed. “Given the new framework, any spike in inflation won’t translate into immediate rate hikes as the Fed wants to compensate for the lost years when they have failed to hit the target,” he writes. “If inflation projections remain at 2% or below for the foreseeable future, this will solidify market expectations for a low rate environment for many years to come. That said, Jay Powell would still have to explain in more detail how the new framework will be translated into policy action.”

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