Against the background of the midterm elections to the US Congress, the Fed may reduce the intensity of monetary policy tightening, at least until this date.
Recall that the US Senate elections will be held on November 8, 2022, when 34 of the 100 senators who will serve six-year terms in the United States Congress from January 3, 2023 to January 3, 2029 will be elected.
The whole reason lies in the need to support the Democrats, from whom Joe Biden himself, the current head of the White House, is a native.
Today, the ratio of forces (Democrats/Republicans) in the country's highest legislative body is almost 50% to 50% and in order, at least, not to lose and maintain the support of the current US president, the executive branch, represented by the Fed, we think will not risk throwing into the fire, a kind of fateful decisions, directly beating on the solvency of his voters.
Therefore, it is more possible that the Fed's interest rate decisions scheduled for 21.09.2022 and 02.11.2022 will be lower than expected values and markets will rise before the end of the year and move into the green corridor.
Although, of course, everything will largely depend on the US inflation data, which will be published on the eve of this event (09/13/2022 at 15:30 Moscow time).
The US Federal Reserve may reduce the intensity of monetary policy tightening by the end of the year - Something like that!
