The Federal Reserve does not need to raise the interest rate beyond 100 basis points because an economic slowdown is in sight. Thus Wharton business school professor Jeremy Siegel at Cnbc. “I think we only need 100 basis points more,” Siegel told “Squawk Box Asia”. “The market thinks it will be a little more – 125, 130 basis points more. My feeling is that we won’t need that much because of what I see as a slowdown. ” “If you want to do it all at once, or if you want to do it over a period of two or three meetings, it won’t make much difference,” he said. “The question is what terminal rate should we arrive at.” The Fed raised its policy rate by 0.75 percentage points in both June and July – the largest consecutive increase since the central bank began using the funds rate as its main monetary policy tool in the early days. 90’s.
Traders are betting that the Fed will raise rates again at its next meeting in September and then again in November and December before cutting rates in the spring, depending on the evolution of economic conditions.