Rates: a real headache for the Fed?
(Boursier.com) — For market analysts, the Federal Reserve will continue its monetary tightening movement in a more measured way next Wednesday, on the occasion of its board meeting on March 22, with an anticipated rate hike of a quarter of a point, while the banking environment remains fragile on the other side of the Atlantic. A 25 basis point hike would thus take the federal funds rate target from 4.75% to 5%, while the probability of a monetary status quo is only 1 in 5.
The CME Group’s FedWatch tool also anticipates for the next meeting on May 3 a range of 4.75-5% (49% probability) or a range of 5-5.25% (39% chance) . For June 14, the highest probability is that of a 4.75-5% range (at 43%), in front of the assumption of a 4.5-4.75% range (33% probability).
Analysts are also more numerous now in these conditions to anticipate a rate cut from next summer. Fed rates are generally expected below 4% to end the year.
Please note that our “Rumors” section aims to echo the information circulating in the trading rooms. These rumors cannot be verified, so they should be viewed with caution.