Federal Reserve Poised for First 50bp Rate Hike in 22 Years: FOMC Preview

seekingalpha2022-05-04

Bet_Noire/iStock via Getty ImagesFederal Reserve policymakers have explained what they plan to do on Wednesday in their comments up through April 23. They're set to hike rates by 50 basis points at ...

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KH321
2022-05-05
KH321
OK
Jess261
2022-05-05
Jess261
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Goldenblue
2022-05-04
Goldenblue
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Funyuan
2022-05-04
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Kristo
2022-05-04
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Txfen80
2022-05-04
Txfen80
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They're set to hike rates by 50 basis points at ...</p>\n\n<a href=\"https://seekingalpha.com/news/3830390-federal-reserve-poised-half-point-rate-hike\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Federal Reserve Poised for First 50bp Rate Hike in 22 Years: FOMC Preview</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFederal Reserve Poised for First 50bp Rate Hike in 22 Years: FOMC Preview\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-04 17:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3830390-federal-reserve-poised-half-point-rate-hike><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Bet_Noire/iStock via Getty ImagesFederal Reserve policymakers have explained what they plan to do on Wednesday in their comments up through April 23. They're set to hike rates by 50 basis points at ...</p>\n\n<a href=\"https://seekingalpha.com/news/3830390-federal-reserve-poised-half-point-rate-hike\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":".IXIC","symbol_name":"NASDAQ Composite","start_time":0,"source_url":"https://seekingalpha.com/news/3830390-federal-reserve-poised-half-point-rate-hike","article_id":"2232305766","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2232305766","pubTimestamp":1651657951,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Bet_Noire/iStock via Getty ImagesFederal Reserve policymakers have explained what they plan to do on","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index",".DJI":"道琼斯"},"translate_title":"美联储准备22年来首次加息50个基点：FOMC预览","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".DJI":0.9,".IXIC":0.9,".SPX":0.9},"content_text":"Bet_Noire/iStock via Getty ImagesFederal Reserve policymakers have explained what they plan to do on Wednesday in their comments up through April 23. They're set to hike rates by 50 basis points at this meeting and likely subsequent ones, and they'll start shrinking the central bank's balance sheet in June.The federal funds rate target range currently stands at 0.25%-0.50% after the Federal Open Market Committee hiked the benchmark rate range by 25bps at the March meeting, its first increase since 2018.\"For the first time in 22 years, the Federal Reserve is poised to raise interest rates by more than a one-quarter percentage point increment, and at consecutive meetings for the first time in 16 years,\" Bankrate Chief Financial Analyst Greg McBride said. FOMC consensus points to a half-point rate hike, with more to come if the Fed seeks to push benchmark rates to 2.5% by year-end, he added.The question isn't whether the Fed needs to be hawkish, it's \"only a debate as to what the right hawkish approach is,\" wrote Evecore ISI's Krishna Guha and Peter Williams in a note to clients.The strength of the labor market supports the expected larger-than usual hike. On Tuesday, the U.S. Department of Labor said job openings in March reached 11.5M, the highest since it started collecting the data in 2000, from 11.3M in February. The job openings rate of 7.1% edged up from 7.0% in the previous month.Balance sheet matters: The rate hikes \"will occur as the Fed simultaneously embarks on the long-awaited reduction in its balance sheet, which we think will shrink by nearly $3T through the end of 2024, from $8.93T today.\" wrote RSM chief U.S. economist Joseph Brusuelas in a note. He also expects the Fed to increase its policy rate to at least 2.5% by year-end.So far, the Fed appears only willing to let maturing Treasury securities and mortgage-backed securities run off of its balance sheet. If the FOMC feels the need to take stronger action to control inflation, it may consider selling some securities.\"I think he (Fed Chair Jerome Powell) will say that asset sales are a tool that could be used in the future but remind us that the plan is to use interest rates as the primary policy tool; QT runs in the background and the path of rates will be adjusted as needed given QT,\" said Tim Duy, chief U.S. economist at SGH Macro.He expects at least four 50bp rate hikes in the Fed's quest to restore price stability. \"Powell likely doesn't want to feed into any hopes of a 75bp hike, but if he lends any credence to that story, even accidentally, market participants will rush to price in 75bp for the June meeting,\" Duy wrote in a note to clients.Geopolitical risks: Will increased risks from the Russia-Ukraine war and Covid lockdowns in China lead the Fed to ease up on tightening? Not likely.\"We think the Fed recognizes that the war/Europe and China/Covid lockdowns are important and present risks to both growth and inflation,\" said Evercore ISI's Krishna Guha and Peter Williams. \"But the FOMC will stay focused on upside domestic inflation risk, respond up-front to potential further global inflation pressures and respond to spillovers from global growth weakness and related FCI tightening only as it materializes.\"For U.S. households, the implications of the rate increases are clear-cut. Borrowing will cost more and savings will earn more. \"This hints at the steps households should be taking to stabilize their finances – pay down debt, especially costly credit card and other variable rate debt, and boost emergency savings. Both will enable you to better weather rising interest rates, and whatever might come next economically,\" said Bankrate's McBride.For banks, higher rates increase their net interest income, but \"the rapid rise in the back end of the (yield) curve has hit GAAP book value,\" wrote a group of equity analysts led by Betsy Graseck. In addition, tighter financial conditions would ultimately slow loan growth. And the Fed shrinking its balance sheet will slow deposit growth as well. In addition, the sharply higher rates will hit banks' capital ratios.As such, the Morgan Stanley analysts are reducing their stock buyback estimates for banks. \"We believe management teams will be more conservative with share repurchases going forward. We are reducing our buybacks for the rest of 2022 by 40%,\" they said.SA contributor John M. Mason sees a 50bp hike on Wednesday followed by at least two more moves this year.","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9068307665,"gmtCreate":1651714840290,"gmtModify":1676534955356,"author":{"id":"3586451610703869","authorId":"3586451610703869","name":"KH321","avatar":"https://static.tigerbbs.com/c1bb8bd7d6d5df5f9732871fe60999ea","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3586451610703869","authorIdStr":"3586451610703869"},"htmlText":"OK","listText":"OK","text":"OK","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9068307665","repostId":2232305766,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9068940284,"gmtCreate":1651712592018,"gmtModify":1676534954599,"author":{"id":"3586490638953193","authorId":"3586490638953193","name":"Jess261","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3586490638953193","authorIdStr":"3586490638953193"},"htmlText":"Okay","listText":"Okay","text":"Okay","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9068940284","repostId":2232305766,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9061712089,"gmtCreate":1651676460286,"gmtModify":1676534947463,"author":{"id":"3582539378503098","authorId":"3582539378503098","name":"Goldenblue","avatar":"https://static.tigerbbs.com/503ccf93eafd90b34388f12ab65cb8af","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3582539378503098","authorIdStr":"3582539378503098"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9061712089","repostId":2232305766,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9061441749,"gmtCreate":1651671389752,"gmtModify":1676534945722,"author":{"id":"4108560907165920","authorId":"4108560907165920","name":"Funyuan","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4108560907165920","authorIdStr":"4108560907165920"},"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9061441749","repostId":2232305766,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9061467526,"gmtCreate":1651669033065,"gmtModify":1676534945088,"author":{"id":"3557634928383187","authorId":"3557634928383187","name":"Kristo","avatar":"https://static.tigerbbs.com/07075676425d47f31685477722d0d415","vip":1,"crmLevel":7,"crmLevelSwitch":1,"idStr":"3557634928383187","authorIdStr":"3557634928383187"},"htmlText":"Great","listText":"Great","text":"Great","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9061467526","repostId":2232305766,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9061464270,"gmtCreate":1651668852990,"gmtModify":1676534945057,"author":{"id":"3586489129629376","authorId":"3586489129629376","name":"Txfen80","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3586489129629376","authorIdStr":"3586489129629376"},"htmlText":"[Speechless]&nbsp;","listText":"[Speechless]&nbsp;","text":"[Speechless]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9061464270","repostId":2232305766,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":277,"commentSize":73,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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