However, one shouldn't expect the same from today's two other major central bank meetings. For one, we weren't too sure what the Fed would offer in terms of communique, even if there were strong expectations of a 25 bps rate hike already. Powell's nod to the market outlook and opening the door for policy changes "if inflation comes down much faster" was something new to work with.
That said, we might not get the same sort of stuff from the BOE and ECB later today.
The former is expected to hike by 50 bps but things are less certain as economic developments continue to play out more negatively in the UK. Consumer spending has collapsed and recession risks are rising quickly, leaving little room for the BOE to keep hiking more aggressively after this.
There are plenty of expectations that they will shift towards 25 bps after this but it wouldn't be that surprising to even see it come as soon as today, considering that there have already been dissenters towards further rate hikes in the last meeting. And if we do see a 25 bps rate hike surprise today, that will see markets rip higher with more optimism than we're already seeing now.
As for the ECB, I can't help but feel this will be a very monotonous decision. A 50 bps rate hike is all but certain and I would expect either the statement or Lagarde (or even both) to reaffirm one more such rate hike again in the next meeting. This week's inflation numbers - especially the core readings - will vindicate their hawkish rhetoric and there is no reason to stray away from that all of a sudden today.
For markets, this is very much already baked in to the expectations so while there might be some nervousness about a more hawkish ECB, it isn't anything that we don't know of over the past few weeks. But still, it is best to wary in case that does play into any changes in sentiment before Wall Street steps in.
