Here's what leading Fed watchers are looking for on Wednesday when the Fed announces its rate decision at 2 p.m. Eastern.
Beyond that, there are weighty questions about whether the central bank’s efforts to bring down inflation can succeed without crashing the economy.
With Fed Chairman Jerome Powell talking about “pain” for the economy in his Jackson Hole speech in August, investors are bracing for a hawkish message. “An issue with an unprecedented 100bp move is that it could convey a sense of policy panic. A similarly unprecedented 75bp move three-peat conveys a better sense of ‘we got this,'” Gregory wrote, in a note to clients.
“If FOMC participants in general hold this view, and Powell specifically holds this view, and they equate ‘similarly-sized’ with 75bp rate hikes, then this should not be the last 75bp rate hike,” said Tim Duy, chief U.S. economist at SGH Macro Advisors. Guha thinks the “terminal” rate – or the high point for rate hikes this cycle – will be revised up to a range of 4.25%-4.5% from the prior estimate of 3.75%-4%.
Once they get to a level that they think is starting to dampen demand, but not so much that things crash, Fed officials intend “to hang out there as the economy slows down,” he added, in an interview on Bloomberg Radio.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
What Cramer is looking at Tuesday — Fed rate watch, 2-year Treasury yield surge, Ford warningU.S. stock futures were up until 2-year Treasury yield on Tuesday kept up its relentless run to 4%.
Read more »
Biggest Fed rate hike in 40 years? 5 things to know in Bitcoin this weekBitcoin tanks as BTC price action prepares for a 'sledgehammer' Fed rate hike.
Read more »
Wall Street drops 1% with focus on Fed By Reuters⚠️BREAKING: *U.S. STOCKS TUMBLE AS WALL STREET BRACES FOR SUPERSIZED FED RATE HIKE - 🇺🇸 🇺🇸
Read more »
US stocks rise ahead of expected interest rate hike by FedStocks closed higher on Wall Street after swaying between small gains and losses much of the day as investors brace for another big interest rate increase this week from the Federal Reserve.
Read more »
Gold Price Forecast: XAU/USD bears move in as the focus stays with the FedThe gold price came under some pressure at the start of the week, down some 0.20% after falling from a high of $1679 to a low of $1,659 on the day and
Read more »
Treasury markets deliver recession warning as Fed plots massive rate hikeThe 10-year Treasury yield jumped to its highest rate since 2011 as investors brace for the possibility that the Federal Reserve will hike interest rates more than previously expected.
Read more »