Fed Considers a 50 Basis Point Rate Hike and a Balance Sheet Reduction – Scotiabank

According to Scotiabank analysts, "A half-point raise in the fed funds target range to 0.75 percent–1.0 percent is predicted alongside the implementation of plans to decrease the balance sheet."

May 04, 2022 - 10:58 AM 365 views

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According to Scotiabank analysts, "A half-point raise in the fed funds target range to 0.75 percent–1.0 percent is predicted alongside the implementation of plans to decrease the balance sheet."

 Important Points:

 "Markets would be highly surprised if the Federal Reserve(Fed) does not increase rates by half a percentage point."

 "Any symptoms of a transition in the explanation of the drivers of inflation toward something that is now regarded to be longer-lasting would be something to keep a close eye on."

 "Nothing in the March dot plot suggests the Fed will slow rate hikes any time soon."

 "The risks to inflationary pressures continue to point higher, implying that Chair Powell would retain his hawkish posture."

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