IBEX 35 takes a break with all eyes on Fed meeting

Market overview

The IBEX 35 index is flat in the morning, with all eyes on the Fed meeting later in the day. The index is currently trading at 9,144.10, down 0.04% on the day. Volume is light, with only 19 million shares traded so far. The index is expected to trade in a range of 9,100-9,180 today.

Fed meeting

The Federal Reserve is widely expected to raise interest rates by 50 basis points at its meeting later today. This would be the second rate hike this year, and the sixth since the Fed began raising rates in March 2022. The Fed is trying to combat inflation, which is currently running at a 40-year high.

Analysts weigh in

"We think it is essentially a done deal that they're going to raise 50 basis points," said Jefferies economist Aneta Markowska. "They still have some work to do in terms of bringing inflation down. If you look at what the market has priced in, it's more than what the Fed is actually delivering. They think the Fed is going to raise rates quite a bit this year."

But not everyone is convinced that the Fed will raise rates by 50 basis points. "I think the Fed is going to do what they did in March, and not raise rates as much as the market is expecting," said Bank of America economist Ethan Harris. "I think they're going to raise rates by 25 basis points."

Market reaction

The market is expected to react positively to a 50 basis point rate hike by the Fed. This is because the market has already priced in a 50 basis point hike. However, if the Fed raises rates by more or less than 50 basis points, the market could react negatively.

Conclusion

The IBEX 35 index is flat in the morning, with all eyes on the Fed meeting later in the day. The Fed is widely expected to raise interest rates by 50 basis points, which would be the second rate hike this year. The market is expected to react positively to a 50 basis point rate hike, but if the Fed raises rates by more or less than 50 basis points, the market could react negatively.