Rate war rocks Wall Street. It’s a war with a single formal shot – the Fed triggered a quarter-point hike in mid-March – and a terrifying blast over loudspeakers. Jerome Powell, the great chief of monetary policy, says that taming inflation is “absolutely essential” and that a half-point increase is on the table for the next meeting on May 4. Mary Daly, head of the San Francisco Fed, points out that it is very likely that the central bank will raise rates by half a point each of the next two meetings. James Bullard, of the Saint Louis Fed, who most demands that rates go up quickly, recalls that an adjustment of three quarters of a point has already been made (Alan Greenspan, 1994) and it was not the end of the world. In short, it is a saturation bombardment. Concentrated, for the first time, in a single day, Thursday. It is worth taking note. It’s not treason, we’ve been warned. Who gives more? Nomura, the Japanese investment bank, predicts that the Fed will raise rates by three-quarters of a point in both June and July.
Source: Ambito
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