The Fed's rate hikes could ultimately lead to the economy cooling off more than the central bank would like, experts say.
by three-quarters of a point for the third consecutive time, to 3%, or it will hike them by an unprecedented one full percentage point to 3.25%.Wall Street is divided on whether the Fed will keep hiking rates aggressively in November, or if inflation pressures will cool enough to allow the central bank to slow the pace for a bit,As such, experts' forecasts for the Fed's key short-term rate after the November meeting range from 3.5% to 4%.
"This data will likely encourage the Fed to continue staying in overdrive but also increases the odds that sooner or later they will make a policy mistake by tightening financial conditions too much to fight inflation," said Timothy Chubb, chief investment officer at Girard, in a report. Investors have no clue where rates might be by the middle of next year, as forecasts for July 2023 range from a low of 3.25% to a peak of 5%. What's more, other central banks, mainly the European Central Bank, are likely to step up the pace and size of rate increases as well. That will likely lead to even more market volatility.
But unless the pace of consumer price increases starts to cool off much more quickly and dramatically in the coming months, the Fed won't be able to slow the pace of rate hikes anytime soon. And forget about the expectations for the Fed being able to pause in 2023 and start signaling eventual rate cuts.
The CEOs of seven of America's largest lenders will appear before the House Committee on Financial Services on Wednesday and again in front of the Senate's banking committee on Thursday. The title of the House hearing? "Holding Megabanks Accountable: Oversight of America's Largest Consumer Facing Banks."
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Biggest Fed rate hike in 40 years? 5 things to know in Bitcoin this weekBitcoin tanks as BTC price action prepares for a 'sledgehammer' Fed rate hike.
Read more »
SPDR S&P 500 ETF Trust (SPY) Forecast: Could we get a pre-Fed rally?Equity markets continue to fall on Friday. Some riskier assets outperform such as Tesla. Apple remains stable as iPhone 14 initial reports look promising by ivanbrian9 stocks trading
Read more »
Buy Dip Sentiment Rising on Falling Crypto Market Ahead of Fed Rate DecisionFallen crypto market fills up with buy the dip sentiment ahead of the Fed rate decision btc bitcoin eth ethereum cryptocurrencies $btc $eth santimentfeed
Read more »
First Mover Americas: Bitcoin Drops to 3-Month Low as Crypto Traders Turn to FedAs bitcoin (BTC) drops to a three-month low and the Ethereum Merge hype fades, crypto analysts see bearish indicators on price charts. Liqquidity and Godbole17 report in First Mover by CoinDesk Markets
Read more »
GBP/USD clings to the 1.1400 mark, ahead of the Fed/BoE’s interest rate decisionsThe British pound loses some traction against the greenback, after hitting a daily low at 1.1355, exchanges hands above its opening price by 0.04%, am
Read more »
10-year yields highest since 2011 before expected Fed rate hikeBenchmark 10-year U.S. Treasury yields jumped to their highest level since 2011 on Monday as investors adjusted for the likelihood that the Federal Reserve will hike rates higher and for longer than previously expected as inflation remains near multi-decade highs.
Read more »