Wall Street Prices In More Rate Hikes By The U.S. Federal Reserve


(MENAFN- Baystreet.ca) Wall Street Prices In More Rate Hikes By The U.S. Federal Reserve

Traders on Wall Street have now fully priced in quarter-point interest rate increases at each of the U.S. Federal Reserve's next two policy meetings.

U.S. markets have also priced in a 70% chance of a third interest rate increase in June of this year.

Expectations are that the terminal rate, which is the point at which interest rates peak, will be at 5.31% by this July.

The revised expectations on Wall Street come as Treasury yields hit their highest levels of the year, with the two-year note rising to 4.71%, which is close to a multiyear high.

Market expectations for monetary policy have changed along with economic reports that have showed a tight U.S. labour market and persistently high inflation.

Economists at Bank of America (BAC) and Goldman Sachs (GS) have revised their Fed policy forecasts to include a June rate increase in addition to raises in March and May of this year.

The Fed has lifted its benchmark interest rate eight times since March 2022, most recently to a range of 4.50% to 4.75% on February 1.

The American central bank has forecast a peak inflation rate of 5.10% and no rate cuts this year.

MENAFN20022023000212011056ID1105605663


Baystreet.ca

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.