Indices reversed the initial trend after Federal Reserve Chairman Jerome Powell threw his support behind “front-loading” rate hikes, including a possible 50 basis point hike in May.
With inflation roughly three times the target of 2% of the fed“It’s appropriate to move a little faster,” Powell said in a discussion of the global economy at International Monetary Fund meetings. “Fifty basic points will be on the table for the May meeting”assured.
The Fed chairman also said he felt investors currently anticipating a series of half-point hikes were “generally reacting appropriately” to the Fed’s emerging fight against rising prices.
Traders in contracts pegged to the overnight fed funds rate currently expect the Fed to raise it to a range between 2.75% and 3% by the end of the year.a rate that would imply increases of half a point in the next three meetings and rises of a quarter point in the other three meetings of the year.
“We are really committed to using our tools to reduce inflation”Powell said, acknowledging that the Fed’s hope that inflation would ease during the economic reopening after the pandemic has not panned out so far, to the point where the Fed is no longer reliant on supply chain improvements for help. global supply, for example.
Source: Ambito
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