Some Doubt Fed’s Rate Hike Plans, While Others Brace for 6% Ceiling
According to the CME Fedwatch tool, there is an 84.3% probability that the Federal Reserve will raise the benchmark rate by 25 basis points to approximately 5.25% to 5.5%. However, there is a 15.7% chance that the Fed will pause at the upcoming meeting. The accuracy of these projections is subject to change based on market sentiment and economic conditions.
Key Points:
- Market awaits Federal Reserve’s rate hike decision in the next 23 days.
- 84.3% chance of a rate hike to 5.25% to 5.5%.
- 15.7% chance of the Fed pausing at the upcoming meeting.
- Some experts believe two more rate hikes this year are reasonable, while others anticipate no additional hikes.
- A research paper suggests the federal funds rate might have to increase to 6.5% to address inflation.
Despite some experts like Mary Daly considering two more rate hikes to be reasonable, there are still those who do not anticipate any additional hikes this year, such as Ryan Sweet. Economist Tuan Nguyen believes there is the possibility of one more rate hike, and Jamie Dimon warns individuals to be prepared for rates potentially reaching 6% or 7%. A research paper suggests a 6.5% bank rate might be needed to address inflation. Tom Luongo believes the rate will end up at 6% this year and predicts more bank failures to come.
Hot Take:
While there are varying opinions on the Federal Reserve’s rate hike plans, it seems that the possibility of further rate hikes cannot be ruled out. With inflation concerns and the potential for economic impact, the central bank’s decision will be closely watched. The projected 6% rate ceiling mentioned by experts indicates the potential for significant changes in the financial landscape.
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