Federal Reserve FOMC to announce interest rate decision tomorrow, 25 basis point hike expected

The Federal Reserve FOMC is scheduled to release its interest rate decision and summary of economic projections on Thursday at 2:00 a.m. Beijing time, followed by a press conference with Chair Kevin Warsh. Current federal funds futures indicate a 92.5% probability of a 25 basis point hike. Market attention has shifted from whether a hike will occur to the potential frequency of future increases, with the new dot plot expected to clarify if this is a one-time adjustment or the start of a new cycle. Analysts suggest that a limited hike could be absorbed by markets, while signals of consecutive increases could push 10-year Treasury yields above 5% and heighten volatility for US stocks and dollar-denominated assets. Warsh faces the challenge of balancing policy communication amid pressure from Donald Trump for lower rates and elevated long-term bond yields.