![]() ![]() In addition, the Fed is expected to begin reducing its asset holdings in a step that will further tighten credit conditions for businesses and households. That would take the Fed's target rate beyond the "neutral" level and into territory that would begin to restrict economic activity, marking one of the faster turnarounds of U.S. Traders in contracts linked to the overnight federal funds rate currently expect the Fed to increase it to a range between 2.75% and 3% by then, a pace that would involve half-point hikes at three upcoming meetings and quarter-point increases at the year's three other sessions. His comments appeared to pin down an expected rate path much steeper than projected at the Fed's March meeting, when policymakers at the median anticipated the target overnight federal funds rate would be increased to 1.9% by year's end. In likely his last public remarks before the Fed's next session, Powell also said he felt investors currently anticipating a series of half-point hikes were "reacting appropriately, generally," to the Fed's emerging fight against rising prices. "Fifty basis points will be on the table for the May meeting." With inflation running roughly three times the Fed's 2% target, "it is appropriate to be moving a little more quickly," Powell said in a discussion of the global economy at the meetings of the International Monetary Fund. WASHINGTON, April 21 (Reuters) - A half-point interest rate increase "will be on the table" when the Federal Reserve meets on May 3-4 to approve the next in what are expected to be a series of rate increases this year, Fed Chair Jerome Powell said Thursday in comments that pointed to an aggressive set of Fed actions ahead. ![]()
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