04/05/2022 07:30
US futures slightly higher on Fed-Day, the day in which the American central bank will announce the decision on fed funds rates.
The consensus predicts a 50 basis point squeeze from the current range of 0.25% to 0.50%. Jerome Powell’s Fed hiked rates on March 16 for the first time since 2018, kicking off a cycle of hikes that, according to some economists, predicts seven monetary tightenings, if not more, by the end of 2022. to counter the rise in inflation in the United States, which jumped 8%.
According to the trend of futures on fed funds, the markets are betting on a tightening of 50 basis points, today, with a probability of 91.6%. The probability that the Fed will raise rates by 75 basis points is just 8.4%.
However, the globle head of Macquarie’s strategy division warned that, in the years 2023-2024, the Fed will be forced to turn around, reintroducing new expansionary monetary policy measures.
“What will happen is that the Federal Reserve will start to initiate a restrictive policy, both through Quantitative tightening and by raising rates; at that point, rates will get closer and closer to the neutral level, and the volatility of asset prices will increase significantly. – said Viktor Shvets, global head of the strategy division of Macquarie, according to the Australian Financial Review – When that happens, the index of financial conditions will shoot up and at that point, the rates of inflation and GDP growth will begin to disappear and the Fed will have no choice but to turn around. ”
At 7.25 am Italian time, Dow Jones futures are up by 0.10%; those on the S&P 500 are up 0.19% and those on the Nasdaq are up 0.28%.
Yesterday the Dow Jones index finished the session up 0.22%, the S&P rose 0.48% and the Nasdaq Composite 0.22%.