"I think will say that four 75-basis point hikes is an awful lot and with this long and variable lag, you need to step back and see the impact. 28, up from 3.85% in March, according to Freddie Mac. The 30-year fixed rate mortgage was at 7.08% in the week of Oct. The housing market is slumping, as some mortgage rates have nearly doubled. Fighting inflation is their primary objective."Īs the Fed has raised interest rates, the economy is beginning to show signs of slowing. "I think the way the market is pricing, I think that's what they're going to do, but I think he's really got to thread the needle on not getting people too excited about the direction of travel. "I think he's going to try to execute the fine art of getting off the 75 without creating euphoria and influencing financial conditions too easy," said Rick Rieder, BlackRock chief investment officer of global fixed income. The challenge for Powell will be to walk a fine line between signaling less-aggressive hikes are possible and upholding the Fed's pledge to battle inflation.įor that reason, market pros expect the Fed chair to sound hawkish, and that could rattle stocks and send bond yields higher.
But strategists also say the market's reaction could be violent if the Fed disappoints. The stock market has already rallied on expectations of a slowdown in rate hikes by the Fed, after a final 75 basis point hike Wednesday afternoon. "So in reality, the market already thinks this is happening, and from my point of view, there's no way the outcome of his press conference is going to be more dovish than that." 1 and then probably another 25 in March," said Julian Emanuel, head of equity, derivatives and quantitative strategy at Evercore ISI. "The market is very fixated on the fact there's going to be 75 in November, 50 in December, 25 on Feb. The 75 basis point hike Wednesday would take the fed funds rate range to 3.75% to 4%, from a range of zero to 0.25% in March. He expects the Fed to raise rates to a level of 4.75% to 5% by spring, and that would be its terminal rate - or end point. "The November meeting isn't really about November. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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