Wall Street Experts Express Opinion on the Fed Rate Decision on March 22

Despite the turmoil in the banking sector and the uncertainty ahead, the Fed will likely approve a 25 basis point rate hike next week, according to market pricing and many Wall Street experts.

Interest rate expectations have been on a fast-paced course for the last two weeks, ranging from a half-point increase to being held constant and even to the fact that the FED may lower interest rates at some point.

General Opinion: FED Will Raise Interest Rates By 25 Base Points

However, there is a consensus that Fed Chairman Jerome Powell and other central bank officials will want to send the message that while they are aware of the turmoil in the financial sector, it is important to continue the fight to reduce inflation.

This will likely be in the form of an increase of 25 basis points, along with reassurance that they have no predetermined path ahead.

Doug Roberts, founder and chief investment strategist at Channel Capital Research, said:

“They have to do something, otherwise they lose their credibility. They want to make 25 and 25 sends a message. But that will really depend on what Powell has to say publicly. … I don’t think he’s going to make the 180-degree shift that everyone is talking about.”

Markets largely agree that the Fed will raise interest rates.

According to CME Group data, which references Fed funds futures contracts, the probability of a quarter-point increase as of Friday afternoon was approximately 75%. The other 25% said there would be no increase, anticipating that policy makers might step back from the aggressive tightening campaign that began a little over a year ago.

However, the Wall Street Journal’s chief economic correspondent Nick Timiraos said in a statement, “FED’s decision to increase 25 basis points or hold steady will probably be determined by the reaction of the market in the coming days.”

*Not investment advice.

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