{"id":417,"date":"2023-03-19T05:02:35","date_gmt":"2023-03-19T10:02:35","guid":{"rendered":"https:\/\/enjoyingthisjourney.com\/fed-rate-hike-uncertainty-what-to-expect-from-march-22-meeting\/"},"modified":"2023-03-19T05:02:35","modified_gmt":"2023-03-19T10:02:35","slug":"fed-rate-hike-uncertainty-what-to-expect-from-march-22-meeting","status":"publish","type":"post","link":"https:\/\/enjoyingthisjourney.com\/fed-rate-hike-uncertainty-what-to-expect-from-march-22-meeting\/","title":{"rendered":"Fed Rate Hike Uncertainty: What to Expect from March 22 Meeting"},"content":{"rendered":"

As the Federal Reserve prepares to make a crucial interest rate decision on March 22, investors are split on the outcome.[0]<\/a><\/sup> On one hand, there is the expectation that the Fed will raise rates by a quarter percentage point as it did in February. On the other hand, some believe the Fed will keep the federal funds rate right where it is. The decision will be based on a combination of slightly slower price increases in the economy last month and a bit of a banking crisis in Silicon Valley Bank (SVB).<\/p>\n

Fed-funds futures traders priced in a nearly 1-in-3 possibility the Federal Reserve will leave rates unchanged at the end of its next policy meeting. Investors are weighing the fallout of SVB's collapse after regulators on Sunday moved to make all depositors whole. Depositors at Signature Bank, a New York-based institution which was shut down on Sunday, were reimbursed by regulators.[1]<\/a><\/sup><\/p>\n

Goldman Sachs economists, in a note released on Sunday evening, forecast that the Fed would not adjust rates at the March meeting out of concern for strain in the banking industry. They left unchanged their expectation that the Fed will deliver 25 basis point rate hikes in May, June and July, lifting the fed-funds rate to a peak of 5.25%-5.5%.[1]<\/a><\/sup><\/p>\n

The Federal Reserve's rapid interest rate increases, and the consequent effect on Treasury yields, has increased uncertainty in regards to the extent to which bank capitalization issues will affect the wider economy. This may restrict the ability of Powell to implement further tightening measures.[2]<\/a><\/sup><\/p>\n

The Federal Reserve's response to the banking sector's difficulties remains uncertain, but on Wednesday, when the Fed wraps up its upcoming policy meeting and reveals whether or not it will opt to raise interest rates and if so, by how much, some clarity will be provided.[3]<\/a><\/sup> Prior to the upheaval of the previous week, numerous specialists predicted the Fed could quicken the rate of rate hikes–allowing a half-point rise after a quarter-point hike the preceding month. However, after SVB's collapse, analysts at Goldman Sachs said they \u201cno longer expect\u201d the Fed to hike rates this month.[3]<\/a><\/sup><\/p>\n

At the Fed meeting, there is much anticipation for an update to the Summary of Economic Projections. This report is released quarterly and outlines the expectations of participants for various aspects, such as inflation and interest rates. Following the meeting, Chair Jerome Powell will hold a press conference.[4]<\/a><\/sup><\/p>\n

0. <\/span>“Will the Fed still raise interest rates?” SFGATE, 15 Mar. 2023, https:\/\/www.sfgate.com\/personal-finance\/article\/will-the-fed-raise-interest-rates-17841622.php<\/a><\/p>\n

1. <\/span>“Traders price in nearly 1-in-3 chance Fed leaves rates unchanged on March 22” MarketWatch, 13 Mar. 2023, https:\/\/www.marketwatch.com\/story\/traders-price-in-nearly-1-in-3-chance-fed-leaves-rates-unchanged-on-march-22-6bfdae5<\/a><\/p>\n

2. <\/span>“Amid systemic stress, economists rethink rate hikes” Investment Executive, 16 Mar. 2023, https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/amid-systemic-stress-economists-rethink-rate-hikes\/<\/a><\/p>\n

3. <\/span>“Fed\u2019s Looming Rate Decision Could Confirm Crisis At Hand\u2014Or Trigger A Worse-Than-Feared Recession” Forbes, 17 Mar. 2023, https:\/\/www.forbes.com\/sites\/jonathanponciano\/2023\/03\/17\/feds-looming-rate-decision-could-confirm-crisis-at-hand-or-trigger-a-worse-than-feared-recession\/<\/a><\/p>\n

4. <\/span>“Fed to Consider a Pause as Fallout From SVB Roils Markets” Yahoo Finance, 19 Mar. 2023, https:\/\/finance.yahoo.com\/news\/fed-consider-pause-fallout-svb-200000314.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As the Federal Reserve prepares to make a crucial interest rate decision on March 22, investors are split on the outcome.[0] On one hand, there is the expectation that the Fed will raise rates by a quarter percentage point as it did in February. On the other hand, some believe the Fed will keep the […]<\/p>\n","protected":false},"author":2,"featured_media":416,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/posts\/417"}],"collection":[{"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/comments?post=417"}],"version-history":[{"count":1,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/posts\/417\/revisions"}],"predecessor-version":[{"id":418,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/posts\/417\/revisions\/418"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/media\/416"}],"wp:attachment":[{"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/media?parent=417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/categories?post=417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enjoyingthisjourney.com\/wp-json\/wp\/v2\/tags?post=417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}