Wednesday June 15, 2022 - 11:54:26 GMT
Share This Story
Global-View.com - www.global-view.com
What will the Fed do? 50bps or 75 bps Hike?
Last week after the CPI report I recall that odds for a 75bp rate hike by the Fed had climbed to 19%. Now it seems that calls for a 75bp hike are coming out of the woodwork, including a WSJ article on Monday that sent US bond yields sharply higher, which carried over into Tuesday.
This sets up a tricky call for the FOMC meeting as 50bps could see a relief rally, even one that is short-lived while a 75bp hike would not be a total surprise.
Whatever the case, Fed credibility is on the line as it has fallen behind the curve and now has to play catchup, even in the face of what is likely to be slowing growth (note, there are increasing calls for a recession)..
As for the reaction, I am wary of even suggesting a relief rally, but given how far these markets have fallen, it is a risk.
On the other hand, whether it is a 50bp or 75bp rate hike, the Fed will have to sound hawkish and indicate more rate hikes are in the pipeline.
Jay Meisler, co-founder, global-view.com
Creator, The Amazing Trader
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."