Fed Set to Raise Interest Rates to 16-Year High and Debate a Pause

[Zorro]

Officials could keep their options open in crafting signals around the endgame for increases

Federal Reserve officials are on track to increase interest rates again at their meeting this week while deliberating whether that will be enough to then pause the fastest rate-raising cycle in 40 years.

“We are much closer to the end of the tightening journey than the beginning,” Cleveland Fed President Loretta Mester said April 20.

Just how much closer the Fed is to that endgame will be a focus of internal debate because officials think their communications around future policy actions can be as significant as individual rate changes.

Officials are likely to keep their options open as they finesse carefully calibrated signals in their postmeeting statement and remarks by Fed Chair Jerome Powell at a news conference after the meeting ends Wednesday.

https://www.wsj.com/articles/fed-set-to-raise-interest-rates-to-16-year-high-and-debate-a-pause-860c8146?st=ef6hkkske3kngsu&reflink=desktopwebshare_permalink

[TheRealNorth]

1. They want more medium-sized banks to fail?

[bucolic_frolic]

2. Inflation and labor market resilience say to me they will go higher into the 3rd quarter

A pause or pivot here is premature

[GregariousGroundhog]

3. The consensus among economists is something like one or two more hikes

I don't have the source handy, but I remember reading relatively recently that roughly half of economists polled think the fed will do one more quarter point hike and roughly 20% think they will do two more quarter point hikes.

I personally think we'll see another quarter point hike on Wednesday. May's consumer price index (CPI) will get released on June 13, so the April and May readings will factor into what the Fed does on June 14th.

[Meadowoak]

4. It's funny how the fed always raises interest rates when there's a Democratic administration,

And lowers interest rates for a republican administration. Quinkydink, I think not.