The euro traded below the $1 parity level ahead of the Federal Reserve’s interest rate decision on Wednesday, at which US policymakers are expected to hike the fed funds rate by at least 75 bps for the third time, widening the interest rate gap with the Euro Area. The ECB raised interest rates by an unprecedented 75 bps in September, following a 50 bps increase in July and signaled further hikes in the next meetings despite recessionary risks. ECB Vice-President de Guindos said that the central bank does not expect the slowdown in the European economy to bring down inflation by itself, emphasizing that interest rates must continue to rise to keep inflation expectations anchored and avoid second-round effects. The bloc has been grappling with an unprecedented energy crisis and a recession looks almost inevitable to analysts, although the central bank steered clear of suggesting that a contraction may take place.