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So far, enough has been said about what the Fed can do today: the consensus expects that in order to combat rising inflation, the Fed will raise rates by 25bps (but not 50bps if Powell doesn’t really want to push the market), the first post-2018 hike together. With forward instructions for a string. Considering where inflation is, it is now very clear that the Fed is far behind the curve – the CPI was here at the time of the listing, the Fed Fund rate was 15%!
Needless to say, the market price was set long before a rate hike that saw a 25 bps increase (and a small difference of 50bps rate increase) more than 100% and a rate increase of more than 7 for 2022.
The consensus also hopes to mention Ukraine’s risks, and although the Fed is not expected to provide details on B / S cuts, it could share a light calendar guide; Consent also expects the points to increase by four / five to 1.1% / 1.4% in 2022) but the “terminal rate” dot will remain unchanged; Elsewhere, the 2022 GDP dot will remain at 3.3% while the Fed will raise both the 2022 and 2023 PCE points.
The FOMC, of course, may surprise either Hawkish or Dovish. Here’s how to determine where the Fed is headed:
Dovish: No Hike Opponent: The statement contains no forward guidelines for Hike; FFR 2022 dot £ 0.9% Statement Strong Concerns over Ukraine. Long term dot <2.5%: 2022 GDP dot <3%: Mild growth in 2022 No growth in PCE dot / 2023.Falcon: Shock 50bps increase, or any dissent only 25bps: Ukraine does not mention the risk; Concerns over long-term inflation expectations; Details about B / S reduction; 2022 FFR dot> 1.4; Long-term FFR dot> 2.5%; 2022 GDP dot> 3 4%: Growth in 2024 PCE dot.
See Zero Hedge to read more.
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The post Fed announces Hawkish 25bps rate hike, signal increase every 2022 meeting as Bullard disagrees