Fed officials expect slower growth and upcoming interest rate increases

Fed officials expect slower growth and upcoming interest rate increases

officers of the Federal Reserve agreed that the interest rates may have to rise faster to combat Inflation, probably at either 50 or 75 basis points in July, according to the protocol published on Wednesday.

"Many participants were of the opinion that a considerable risk that the committee is now facing was that an increased inflation could solidify if the public began to question the determination of the committee, if necessary," according to the Protocoll said.

The futures markets are now praising a 90 percent probability of an increase of 75 basis points and a 10 percent probability of an increase of 50 basis points this month.

"[This IS] After the publication of today's protocol, hardly anything has changed," said Jack Farley, macroanalyst and moderator of the Forward Guidance Podcast from Blockworks. "Two things could increase the likelihood of a more moderate increase by 50 basis points: the GDPnow estimate of the Atlanta Fed from -2.1 % for the second quarter (season -adjusted annual rate) and the recent decline in raw material prices that could dampen the inflation rate in June."

The employees also lowered their growth forecasts for the second half of 2022 and 2023 - despite the recovery of the growth of gross domestic product in the second quarter.

At the committee of the committee's monetary-political session from June 14th to 15th, the central bankers opted for an interest increase by 75 basis points, an increase that Fed chairman Powell described as "unusually high".

"Today's increase in 75 basis points is clearly unusually large, and I do not expect the movements of this size to be common," said Powell during a press conference on June 15th.

The Wednesday protocol suggests that the officials could tend to another increase of 75 basis points at the meeting from July 26th to 27th.

"After the publication of the higher than expected inflation data, the monetary policy interest rates instead indicated a considerable probability of 75-basis movements both in the meetings in June and July," says the protocol.

stocks remained largely unchanged in the news. The S&P 500 took 0.1 % and Nasdaq slipped by 0.4 % towards the end of the trading day - while Bitcoin was essentially unchanged and increased by 0.4 %. According to Nicholas Colas, co -founder of Datatrek Research, corporate profits will have a greater impact on stocks than interest rate increases.

"Shallenger prices do not take care of recessions; they take care of the harmful effects that recessions have on the corporate gains," said Colas. "We believe that large US companies such as those in the S&P 500 in the next 12 to 18 months will make profits regardless of the economic conditions."

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The contribution "Fed Officials Expect Slower Growth, Inminent Rate Rises" is not a financial advice.