US Federal Reserve likely to consider 75 bps interest rate hike
A report in the Wall Street Journal, written by the ‘Fed Whisperer’, said that the Fed may actually hike rates by 75 basis points (bps). The Fed raised rates by a half percentage point at its meeting last month, the first such increase since 2000.
US equities tumbled on Monday, with the S&P 500 confirming it is in a bear market, as fears grow that the expected aggressive interest rate hikes by the Federal Reserve would push the economy into a recession.
A report in the Wall Street Journal, written by the ‘Fed Whisperer’, said that the Fed may actually hike rates by 75 basis points (bps). The Fed raised rates by a half percentage point at its meeting last month, the first such increase since 2000.
“It may consider surprising the market by a larger than expected 75 bps hike tomorrow,” the report said.
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The market immediately took note, bonds sold off, yields shot up even more, and the dollar strengthened. The question is – is this a directed leak from the Fed itself? Does the Fed want to prepare the market for a higher than 50 bps rate hike?
In any case, the market is now pricing in 70 bps.
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