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Federal Reserve decision at 2 pm…

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Elderberry:
CNBC by Patti Domm 1/31/2023

Fed expected to slow rate hiking to a quarter point but will stay unrelenting in inflation battle

Key Points

•   The Federal Reserve is expected to raise interest rates by a quarter point Wednesday, its smallest increase since it began hiking rates last March.

•   Market pros are expecting Fed Chair Jerome Powell to sound hawkish, meaning he will lean toward tighter policy and keeping interest rates high.

•   “Powell is more focused on inflation going down and staying down than trying to help the S&P 500,” said one strategist. “His legacy is not going to be determined by where credit spreads are or where the S&P is going. It’s going to be determined by whether he slayed inflation and it stayed down.”

The Federal Reserve is expected to raise interest rates by just a quarter point but also likely signal it will stay vigilant in its fight against inflation even as it reduces the size of the hikes.

The Fed releases its latest rate decision Wednesday at 2 p.m. ET, and Fed Chair Jerome Powell briefs the media at 2:30 p.m. The expected quarter-point hike follows a half percentage point increase in December, and would be the smallest increase in the federal funds target rate range since the first hike of the cycle last March.

While the meeting is expected to be relatively uneventful, strategists say it could be a challenge for the Fed chief to temper the reaction in financial markets. The markets have been rising as investors expect the central bank might succeed in a soft landing for the economy while also snuffing out inflation sufficiently to move back to easing policy.

“How is he going to tell people to calm down, chill out and don’t get so excited by us getting close to the end of the interest rate increases?” said Peter Boockvar, chief investment officer at Bleakley Financial Group. “He’s going to do that by still saying the Fed’s going to stay tight for a while. Just because he’s done doesn’t mean it’s a quick bridge to an ease.”

The Fed’s rate hike Wednesday would be the eighth since last March. It would put the fed funds target rate range at 4.50% to 4.75%. That is just a half percentage point away from the Fed’s estimated end point, or terminal rate range of 5% to 5.25%.

“I think he will push back on financial conditions. I think the markets are expecting that. I think people realize how much credit spreads have moved, how much the equity market has moved, how much tech stocks have moved. This month has been extraordinary,” said Rick Rieder, BlackRock’s chief investment officer for global fixed income.

More: https://www.cnbc.com/2023/01/31/the-federal-reserve-is-likely-to-hike-rates-by-a-quarter-point.html

Hoodat:

--- Quote from: Elderberry on February 01, 2023, 01:29:35 pm ---•   Market pros are expecting Fed Chair Jerome Powell to sound hawkish, meaning he will lean toward tighter policy and keeping interest rates high.

•   “Powell is more focused on inflation going down and staying down than trying to help the S&P 500,” said one strategist.

--- End quote ---

If Powell really wants to stop inflation, then all he has to do is to stop printing more money.

catfish1957:

--- Quote from: Hoodat on February 01, 2023, 01:54:58 pm ---If Powell really wants to stop inflation, then all he has to do is to stop printing more money.



--- End quote ---

And padlock the Capitol so no one can get in.

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