The Fed Is Expected to Raise Interest Rates by Three-Quarters of a Point and Then Signal It Could Slow the Pace

For that reason, market pros expect the Fed chair to sound hawkish, and that could rattle stocks and send bond yields higher. Yields move opposite price.

"I think he's going to try to execute the fine art of getting off the 75 [basis points] without creating euphoria and influencing financial conditions too easy," said Rick Rieder, BlackRock chief investment officer of global fixed income."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 [Powell] 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. You're seeing it in housing. You're starting to see it in autos," said Rieder."You're seeing it in some of the retailer slowdowns, and you're certainly seeing it in the surveys. I think the idea that you're slowing, it's important how he describes it.

The Fed should be dependent on incoming data, and while inflation is coming down, the pace of decline is unclear, Rieder said.Consumer inflation in September ran atGapen expects the economy to dip into a shallow recession in the first quarter. He said the equity market would be concerned if inflation were to stay so high the Fed would have to raise rates even more sharply than expected, threatening the economy even more.

"The markets want to be relieved, particualy the equity maket," said Rieder."I think what happens to the equity market and the bond market are different because of the technicals and the leverage. ... But I think the market wants to believe that the Fed, they're going to get to 5% and stay there for awhile. People are tired of getting bludgeoned, and I think they want to believe the bludgeoning is over.

Loans Loans Latest News, Loans Loans Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

What Cramer is watching Wednesday — Fed day, AMD signs of life, China hits Estee LauderU.S. stock futures drop Wednesday ahead of what's expected to be the Federal Reserve's fourth straight meeting of an interest rate hike of 75 basis points. Do the opposite of what Cramer says to do Can we look at replacing Cramer and find someone else who just doesn’t act like a wind sock and provides some real analysis?
Source: CNBC - 🏆 12. / 72 Read more »

Central Bank Watch: Fed Speeches, Interest Rate Expectations Update; November Fed Meeting PreviewFed tone was hawkish in September and October, although few FOMC members began to soften their tone. The Fed may slowdown its pace of tightening once the calendar turns to 2023. Overall, markets expect 75-bps hike this week.
Source: DailyFX - 🏆 305. / 63 Read more »

How High Will Interest Rates Go? - The Journal. - WSJ PodcastsFor months the Federal Reserve has been raising interest rates at a fast and furious pace to combat inflation. Now some Fed officials are advocating for a slower, steadier approach. WSJ’s Nick Timiraos explains the debate within the Fed over just how high interest rates should go. Further Reading: -Two Fed Officials Make Case for Caution With Future Interest Rate Raises -Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes Further Listening: -The Fed’s Plan to Curb Inflation -Can the Fed Lower Inflation Without Causing a Recession? -The Fed’s Shifting Inflation Message NickTimiraos mm.. NickTimiraos erylmaz_filiz
Source: WSJ - 🏆 98. / 63 Read more »

Fed poised to raise interest rates again, leaving questions about what’s nextLooming over the Federal Reserve meeting that ends Wednesday is a question of intense interest: Just how high will the Fed’s inflation-fighters raise interest rates — and might they slow their rate hikes as soon as next month? We’ll see how politically controlled the FED is today. The DEMs don’t need anymore bad news a week before elections. I’m betting that they don’t raise rates to give DEMs a shot in the arm to start blabbering that inflation is under control.
Source: chicagotribune - 🏆 8. / 91 Read more »