Markets Pricing Mild Fed Hiking Cycle, but Investors Should be Cautious
Dow Jones14:28
0628 GMT - Futures markets are pricing a relatively mild Federal Reserve hiking cycle through the end of 2027, but the history of previous cycles suggests investors should be cautious about assuming a modest endpoint, T. Rowe Price's Tim Murray says in a note. "Since 1994, five of six Fed hiking cycles have seen the federal funds rate rise by at least 175 basis points from where the cycle began, highlighting the potential for rates to move further than markets initially expect," the capital markets strategist says. "While the current futures curve may prove accurate, history suggests that once the Fed has started hiking, the endpoint has often been considerably higher than markets initially expected," he says.
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