The day everyone has been waiting for since March is finally here, the June FED meeting will be held tomorrow.

FED Chairwoman Jane Yellen hasn´t mentioned it but everyone knows that tomorrow the FED will hike the interest rates again after hiking them back in March.

The FED started tightening the monetary policy about 2 years ago, but in the last 2 years, we have seen just 2 rate hikes. While now, we´re seeing 2 rate hikes in 3 months, so the pace is increasing.

Although, we know they won´t keep the same pace unless the US economy ignores all forecasts and really surprises every analyst out there.

I don´t think we will see a big move in inflation headlines tomorrow. There might be a whipsaw caused by nerves right before or immediately after the FOMC statement gets published, but we don´t expect the USD to take any medium term direction on the headline.

The interest lies elsewhere. The rate hike tomorrow is a done deal and the probability is at almost 100%, so it is already priced in.

The next rate hike, or path of monetary tightening, after tomorrow is what the market is interested in. Probabilities for another hike in September are below 30%, while December stands at around 50%.

These probabilities will change considerably for the better if we get some hints from Yellen of a steeper path, or for the worst if the comments are not that hawkish.    

So, we will sit out the initial noise which will come from the rate hike and try to read between the lines in the FOMC statement and in Yellen´s press conference.