What a difference a week can make.
Following this week’s testimony on Capitol Hill from Federal Reserve Chair Jerome Powell, the financial market is now penciling in a larger-than-expected rate hike at this month’s Federal Open Market Committee (FOMC) policy meeting.
Investors are expecting a 50-basis-point increase in the benchmark federal funds rate (FFR). Just a week ago, most traders were anticipating a quarter-point bump.
Here is a look at where things stand, according to the CME FedWatch Tool:
All of this could have been avoided if the central bank pulled back all the stimulus and relief packages a few months after the first wave of the coronavirus pandemic or front-loaded its rate hikes in the fall of 2021.
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