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.