FOMC: Extra 50 bps in the pipeline – UOB By pabspiovano Fed InterestRate CentralBanks Banks
“The 3/4 May 2022 FOMC as widely expected, continued it rate hiking cycle by lifting the policy Fed Funds Target rate by 50bps to 0.75-1.00%, the biggest hike since 2000, and importantly, it signaled clearly that more rate hikes will follow with its focus on reining in inflation as it ‘anticipates that ongoing increases in the target range will be appropriate’. Unlike the Mar FOMC, the decision this time was unanimous .
“Even as FOMC Chair Powell confirmed that the Fed is ‘on a path to move policy rate expeditiously to more normal levels…Additional 50 bps increases should be on table at next couple of meetings’, he dismissed speculation that thewas contemplating an even larger increase of 75bps hike in the months ahead, saying that it is ‘not something that the committee is actively considering’.”
“We continue to expect 25bps in every remaining meeting of this year. Including the Mar FOMC’s 25bps hike and yesterday’s 50bps hike, this upgrade now implies a cumulative 250bps of increases in 2022, bringing the FFTR higher to the range of 2.50-2.75% by end of 2022 . We maintain our forecast for two 25bps rate hikes in 2023, bringing our terminal FFTR to 3.00-3.25% by mid-2023 .”
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
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