JP Morgan, Goldman economists now expect Fed to raise rates by 75 basis points on Wednesday

Economists at JP Morgan and Goldman Sachs said in client notes Monday that they now expect the Federal Reserve to raise its policy rate by 75 basis points on Wednesday.

A 100-basis-point hike would increase the fed-funds rate by 1% from its current 0.75% to 1% target range. “The Fed has to rein in demand by reducing excess liquidity,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, by phone. While he noted the central bank can’t control supply imbalances, it can control demand by raising rates, which makes it more expensive for households to spend on credit.

Nothing stops or slows down the increase in the price of oil, gas, food; so inflation will remain high. To fight inflation, Fed will raise interest rate as much as the increase in inflation. High interest rates reduce earnings; hence, kill stocks, create Bear Market & recession.

Markets dropped as investors worried inflation will cause Fed to raise interest rate triggering recession. 8.6% inflation is record high so Fed will raise rates during next 7 months to bring inflation down to 2%. Stock market continues to crash & burn next 7 months then recession

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