Sunday, July 21, 2024
HomeBusinessFed signals fastest tightening since 2006; markets see more By Reuters

Fed signals fastest tightening since 2006; markets see more By Reuters


Related stories

St Vincent and the Grenadines: An Emerging Offshore Business Jurisdiction

St Vincent and the Grenadines (SVG), an Eastern Caribbean...

Adam Lindemann’s Venus Over Manhattan Wraps Up Latest Show-Stopping Exhibits

Founded by Adam Lindemann in 2012, Venus Over Manhattan...

100+ Smooth Pick-Up Rizz Lines For You To Rizz Up A Girl

Have you ever tried approaching someone? but failed...

Utanmaz Türkler: Exploring Cultural Nuances and Societal Impacts

Introduction "Utanmaz Türkler" translates to "Shameless Turks" in English. This...

Why Trusts Are Key to Wealth Preservation

When it comes to preserving wealth across generations, few...


© Reuters. A screen displays the Fed rate announcement as traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 16, 2022. REUTERS/Brendan McDermid

By Ann Saphir

(Reuters) – Federal Reserve policymakers on Wednesday signaled much faster interest rates hikes this year than they had expected just a few months ago, getting them to about 1.9% by the end of the year as they try to tamp down soaring inflation.

Markets swiftly priced in their agreement, and then some, with trading in contracts tied to the Fed’s target policy rate pricing in a rate of 1.93% by the end of 2022.

The last time the Fed raised rates as quickly as policymakers now expect was in 2004-2006.

Back then, they lifted rates by a quarter of a percentage point at every meeting; since then they have gone much slower when tightening policy, amid weaker recoveries and sleepier inflation.

Now, with inflation by the Fed’s preferred inflation gauge running at three times its 2% goal, policymakers are “acutely” aware of the need to stabilize prices and committed to doing so, Fed Chair Jerome Powell said Wednesday.

But the exact tempo of the rate hikes remains in question, with markets pricing in a good chance of a half-point interest rate hike in May or June.

Powell left the door well open to that possibility, saying repeatedly that if inflation did not cool off as expected, the Fed would accelerate its rate hikes.

And indeed, seven of the Fed’s 16 policymakers penciled in rate hike paths that would require at least one half-point increase, if not more, this year.

See also  Russian oligarchs can do business in Turkey if not against law: Foreign minister

“Clearly, the (Fed’s policysetting) committee intended to send an aggressive signal of their resolve to rein in inflation and keep inflation expectations in check,” wrote Regions’ Chief Economist Richard Moody.

The markets got the message.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Source link

Bellie Brown
Bellie Brown
Hi my lovely readers, I am Bellie brown editor and writer of I write blogs on various niches such as business, technology, lifestyle., health, entertainment, etc as well as manage the daily reports of the website. I am very addicted to my work which makes me keen on reading and writing on the very latest and trending topics. One can check my more writings by visiting

Latest stories