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Federal Reserve:Meetings/2023 February 01: Difference between revisions
Federal Reserve:Meetings/2023 February 01 (view source)
Revision as of 22:05, 31 January 2023
, 31 January 2023→Analyst commentary
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=== Analyst commentary === | === Analyst commentary === | ||
Mohamed A. El-Erian argues the Fed should raise rates by 0.50 bps. His main arguments are:<ref>https://www.bloomberg.com/opinion/articles/2023-01-26/why-the-federal-reserve-should-raise-rates-by-half-a-percent</ref> | 1. Mohamed A. El-Erian argues the Fed should raise rates by 0.50 bps. His main arguments are:<ref>https://www.bloomberg.com/opinion/articles/2023-01-26/why-the-federal-reserve-should-raise-rates-by-half-a-percent</ref> | ||
* While inflation will indeed continue to come down in the immediate future, its main drivers have been shifting to the service sector, thereby increasing the risk of more embedded price pressures when the labor market remains solid. | * While inflation will indeed continue to come down in the immediate future, its main drivers have been shifting to the service sector, thereby increasing the risk of more embedded price pressures when the labor market remains solid. | ||
* With global growth surprising on the upside, the window for more orderly rate increases has been opened wider. | * With global growth surprising on the upside, the window for more orderly rate increases has been opened wider. | ||
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* A faster journey to the peak rate that has already been signaled, and reiterated by Fed officials several times, reduces the complexities of linking the path to a variable destination. | * A faster journey to the peak rate that has already been signaled, and reiterated by Fed officials several times, reduces the complexities of linking the path to a variable destination. | ||
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Danielle DiMartino Booth, still expects 0.25bps despite financial conditions loosening:<ref>https://www.youtube.com/watch?v=x1jPCbLAZI4</ref> | 2. Danielle DiMartino Booth, still expects 0.25bps despite financial conditions loosening:<ref>https://www.youtube.com/watch?v=x1jPCbLAZI4</ref> | ||
* 0.25 bps rate hikes still expected in march and probably 1 last one in May. | * 0.25 bps rate hikes still expected in march and probably 1 last one in May. | ||