The meeting of the monetary policy committee, which will end on the Italian evening, will clarify how many rate hikes are expected in 2022 and by how much
There Federal Reserve American means raise rates reference for the first time in nearly two years to counter the‘inflaizone. The meeting of the monetary policy committee, which began yesterday morning, will end at noon. A press release will be released in the evening (Italian time) and the president of the Fed Jerome Powell will hold a press conference.
The powerful Federal Reserve could, at the end of these two days of discussions, announce that in March, at the next meeting, the rate hikes will begin. The key ones had been reduced to a range of 0 to 0.25% in March 2020, in the face of the Covid-19 pandemic, to support the economy through consumption. Monetary institution officials will also say whether they will drop by 25 basis points or directly by 50 pointspushing overnight rates to a range from 0.25 to 0.50% or 0.50 to 0.75%.
“We still expect two key rate hikes in the first half of 2022 and none in the secondas inflation fears should subside, “they said in a statement Steve Englander and John Davieseconomists of Standard Chartered Bank. “But until inflation slows significantly, there is a risk that the Fed will say and do more rather than less,” they warn.
Meanwhile, the European stock exchanges, after yesterday’s positive close and despite the red on Wall Street, sunk by interest-rate-sensitive technology stocks (the Nasdaq has a weight of 2.28%), while waiting for the Fed, they try to raise your head. The meeting of the monetary policy committee will definitively clarify how many rate hikes are expected in 2022 and by how much. With US inflation raging at a 40-year high, the Fed is unlikely to back down on its intention to raise interest rates and will almost certainly signal its first hike as early as March.
However, the nearly 9% drop in the S&P 500 this month and the flattening of the US yield curve are not good indicators of the sentiment towards the economic outlook and could mitigate one too aggressive stance on the part of the Fed. The fine line between action to contain inflation and a tightening of monetary policy that is not too quick to get out of the pandemic crisis is exactly the line that Fed number one Powell has to walk. THE markets will watch his every step.
READ ALSO:
Ukraine, Biden evaluates the sending of troops: the escalation puts the stock exchanges in red
Fed, Powell declares war on inflation: “We will prevent the increase from taking root”
Pay attention to Powell’s words, this time the Fed is truly a market mover
#Usa #Fed #unveils #rate #cards #hikes #ready #March