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Investing.com – Breathtaking hours before the highly anticipated decision, which is expected to rise Wednesday, but also indicates that it may begin to slow the pace of future interest rate hikes.
Market pundits say a more aggressive Fed stance could trigger a backlash, as markets are also bracing for the Fed to finish raising interest rates to 5% in March.
Hardcore Powell
Market pundits say Federal Reserve Chairman Jerome Powell should appear a little aggressive in his briefing today, pointing out that the Fed’s goal is to crush inflation.
The Federal Reserve is also expected to raise interest rates by three-quarters of a percentage point, before signaling that it could reduce the size of its rate hikes starting in December.
Bank of America (NYSE 🙂
“We think they will raise rates by 75 and open the door to a lower rate hike starting in December,” said Michael Gabin, US chief economist at Bank of America.
“I expect Fed Chairman Jerome Powell to indicate during his press conference that the Fed discussed the slowdown in rate hikes but did not stick to it,” added Gabin.
Michael also expects the Fed to raise interest rates by half a percentage point in December.
December is the pivot
Michael Gabin, US chief economist at Bank of America, says the November meeting isn’t really the most important, but the December meeting and signals.
“We expect the Fed to raise rates from 4.75% to 5% by the spring, and that will be the final interest rate – or the end point,” added the US chief economist at Bank of America.
more pessimistic
“The market is very focused on the fact that there will be 75 basis points in November, 50 basis points in December, 25 basis points on February 1st and then maybe another 25 basis points in March,” said Julian Emanuel, head of equities. , derivatives and quantities at the Evercore ISI.
the biggest challenge
“The challenge for Powell will be to walk a fine line between signaling the possibility of small rallies and supporting the Fed’s commitment to fighting inflation,” says the market strategist.
For this reason, market professionals expect the Fed chairman to appear aggressive, which could upset equities and push bond yields higher as yields move against price.
black rock
“I think it will try to get rid of 75 basis points without impacting financial conditions,” said Rick Rieder, chief investment officer of global fixed-income firm BlackRock.
“I think the market price is what they will do, but I think they shouldn’t really get people excited about the direction of interest because fighting inflation is their main focus,” added BlackRock’s chief investment officer, Global Fixed. Income.
