Global markets shudder focusing on next Fed rate hike – JPMorgan economist expects 75 bps rise
Major US stock indexes and cryptocurrency markets fell sharply on Monday, as the day has long been considered one of the bloodiest days of the week. CNBC’s Scott Schnipper said Monday that “the S&P 500 is now in the official bear market, according to the S&P Dow Jones Indices.” Precious metals such as gold and silver also fell in value, as the price of gold per ounce slipped 2.67% and silver fell 3.58%. The entire encryption economy lost 18% overnight on Monday and BTC fell below $ 21,000. Currently, all eyes are on the upcoming meeting of the Federal Open Market Committee (FOMC) where members of the Federal Reserve are expected to raise the interest rate on federal funds. 5 minute BTC / USD chart at 10:15 p.m. (ET) on Monday 13 June 2022. Moderate increases can be between 25 and 50 bps. The Fed could reach up to 75 to 100 bps in the next session, and some predict that 75 basis points are on paper. Last week, CME Group data showed that the market is priced with a 95% chance that the Fed will raise the benchmark interest rate by 50 bps. However, JPMorgan economist Michael Feroli believes that an increase of 75 bps and 100 bps is also possible. Feroli told customers in a note Monday that a “staggering rise in long-term inflation expectations” could push the Fed to raise interest rates by 75 basis points on Wednesday. “One might wonder if the real surprise would actually be the 100 bp hike, which we think is a non-trivial danger,” Feroli added.
Goldman Sachs economists predict 75 bps increase – JPMorgan strategic analyst Marko Kolanovic believes a Dovish surprise could happen
Goldman Sachs economists agree with Feroli as they believe that a 75 bps increase will probably be announced at the FOMC meeting. “Our Fed forecast is revised to include 75 bps increases in June and July,” Goldman economists explained on Monday. Goldman Sachs analysts’ note to investors adds: We expect two more interest rate increases in 2023 to 3.75-4%, followed by a reduction in 2024 to 3.5-3.75%. We expect a 50 bp increase in September, followed by 25 bp increases in November and December, for a fixed terminal interest rate of 3.25-3.5%. We expect that the median dot will be 3.25-3.5% by the end of 2022. Meanwhile, despite Feroli forecasting 75 bps, JPMorgan’s Marko Kolanovic told the press that the US was likely to avoid a recession. JPMorgan Chase & Co. strategic analyst explained that the Fed may be aggressive in the future because of the madness in the bond markets and the stock markets as well. “The strong PPC printout on Friday that led to a rise in yields, along with a sell-off in cryptocurrencies over the weekend, is exacerbating the investment climate and driving the market down,” Kolanovic’s note to customers said in detail on Monday. “However, we believe that the rate hike in the interest rate market has gone too far and the Fed will be extremely surprised by what is currently being priced in the curve,” added the JPMorgan strategic analyst. Tags in this story CME Group, CPI, Crypto markets, Dovish, Economics, Economy, Fed, Federal Reserve, FOMC, Goldman Sachs economists, Hawkish, inflation, JPMorgan economist, JPMorgan general, Markets, Markets Shudder, Marko Kolanovic, Michael Feroli, Moderate, Forecasts, Stock Exchanges, US Economy What do you think about the upcoming FOMC meeting and the next interest rate hike? Do you think it will be mediocre or aggressive? Or do you think there is a strange surprise on the papers? Tell us your opinion on this topic in the comments section below. Jamie Redman Jamie Redman is the head of news at Bitcoin.com News and a financial technology journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 5,000 articles on Bitcoin.com News about the subversive protocols that are appearing today.
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