The Federal Reserve on Wednesday will hike rates by a quarter-point, a downshift from December but will make sure to sound hawkish, economists said.
The Federal Reserve will downshift to a 25 basis point rise in its policy interest rate at their upcoming interest-rate meeting and will work overtime to make sure that the market doesn’t get the idea that rate increases are finished, economists said.
“Despite the good news on inflation and being one step closer to done, it’s likely too soon for the Fed to stop raising rates and likely too soon to signal a stop is imminent,” said Jonathan Pingle, economist at UBS. Powell will hold a press conference at 2:30 p.m. Eastern on Wednesday, a half-hour after the Federal Open Market Committee announced its rate decision.
Investors who trade in fed funds futures markets now expect the top end of the Fed’s benchmark rate to be 4.5% at the end of this year and 2.9% at the end of 2024, noted Ashworth.Heading into Friday trade, the S&P 500 SPX has bounced 15% from its October lows, and riskier assets have seen stronger moves: bitcoin BTCUSD is up 46% from late November levels.
To hold expectations, Powell will continue to press the theme that he doesn’t think the Fed is done, Bostjancic said.After a quarter-point increase, Bostjancic thinks the Fed will raise rates by two more quarter percentage points — in March and May — before pausing. That would put the peak of the benchmark rate up to a range of 5%-5.25%.Read: The economy doesn’t look as good as GDP suggests
Ellen Zentner, chief U.S. economist at Morgan Stanley, said the Fed will pause after Wednesday’s meeting.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Jim Cramer gives his take on the labor market, wage inflation and the Federal ReserveCramer gave his take on the state of the labor market on Thursday.
Read more »
Stock futures tick down after the Dow posts a five-day win streakInvestors are watching earnings reports and economic data ahead of the Federal Reserve's next meeting.
Read more »
Afghan soldier seeking U.S. asylum freed from immigration holdFederal prosecutors have dropped an immigration charge against Abdul Wasi Safi. The Afghan soldier was arrested trying to cross the Mexico border in an attempt to seek asylum fleeing the Taliban.
Read more »
US inflation expectations renew multi-day top ahead of US Core PCE Price IndexAs markets await the Federal Reserve’s (Fed) preferred inflation gauge, the US inflation expectations per the 10-year and 5-year breakeven inflation r
Read more »
EUR/USD bears eye 1.0850 support as US Dollar traces yields ahead of Fed’s preferred inflationEUR/USD bears eye 1.0850 support as US Dollar traces yields ahead of Fed’s preferred inflation – by anilpanchal7 EURUSD ECB Fed Inflation YieldCurve
Read more »
US Dollar is at breaking point ahead of critical US data and the FedThe US Dollar has been pressured this week leading into the key US data events on Thursday although subdued trading is expected form here as investors
Read more »