Fed Minutes to Reveal Odds of Another Larger Hikes
How many policymakers saw a larger rate hike at their last meeting? And whether they need to increase the terminal rate higher? Federal Reverse officials could provide more info today.
US central bank will release minutes at 2 p.m. Wednesday of their Jan. 31-Feb.1 gathering, at which they took the Fed's benchmark policy rate to a target range of 4.5% to 4.75%.
Fed watchers saw that the central bank may continue to raise rates by 25 basis points as the Fed's policy statement on Feb.1 said further rate hikes will depend on many factors.
But Cleveland Fed president Loretta Mester and St. Louis Fed President James Bullard said last week that another 50 basis-point rate hike will be necessary and should be on the table for further decisions. The minutes today could show insight on whether other officials shared the same view.
That at least gives us some sense of potentially how quickly the Fed might shift if needed. If you think 50 is obviously on the table, then that probably suggests that the terminal rate is going to be higher as well, said Omair Sharif, founder of Inflation Insights.
For each March and May, quarter-point rate hikes are fully priced in, and investors see another such move in June, with rates peaking at 5.37% this year, according to financial futures contracts.
In addition, markets expect the Fed to extend its rate hikes for longer than expected due to stronger economic data. The minutes could also provide insights on how officials interpreted the economic data, providing hints on how they interpret the upcoming data.
Source: Bloomberg, CME Group
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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知性的林顿 : Brother, look at the rise and fall of the stock market with peace of mind. Your mentality makes it easy to lose money
Revelation 6 : Ok then. Tell us how you really feel @agreeable Leopard_91 . Actually, the chain of command on printing money starts at the White House- U.S. Department of the Treasury- Bureau of Engraving and Printing, but you’re right they have printed to much money. Raising the interest rates isn’t going to help you much if the federal government continues to pour money into an economy and the interest rate hikes are attempting to choke it. It’s like Powell trying to put out a fire and all of those who approve the budget adding more fuel to it. At this rate Powell and the boys could raise the interest rates to 18% and as long as the out of control budgets keep pouring the money back in the only thing that’s going to get choked are the American people. You can blame this all on Biden and the Democrats but somewhere down the line you have to come to the realization that there had to be a significant number of Republicans who said,” Hey, this is a good idea.” or it wouldn’t have gotten passed. And that’s just the budget, it doesn’t include all the emergency spending bills like to the Ukraine or for disaster assistance and all the spending that nice and neatly tucked away hidden in other bills that we never hear about. Those trillions of dollars are being dumped into an economy that’s supposed to be choked by interest rate hikes alone. Fat chance of that happening. With all that money being showered on manufacturers they can’t even find enough employees to fill the jobs. That should tell you something. With competition for employees wages are driven up which is great for employees but it spurs more demand and spending at the retail level and hence drives inflation up. Wage inflation also helps increase the price of products and that’s a dollar for dollar increase straight across the board. It’s a vicious circle.
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MooRyeLue802 知性的林顿: