A March Fed rate hike nearly a done deal
Investors currently see a 83% probability that the Fed will raise its benchmark overnight lending rate at its March 15-16 policy meeting, according to CME Group's FedWatch program. They are pricing in another three rate hikes this year.
On 1 December last year, the probability of a rate hike in March was only 24%.
Why it rised so quickly?
In fact, the Fed is becoming hawks. Recently, several Fed officials nod to March rate hike including Lael Brianard who may get the nomination of Fed vice chair.
Some officials even put the possibilty of a fourth and more hike in 2022 into play.
In fact, the Fed is becoming hawks. Recently, several Fed officials nod to March rate hike including Lael Brianard who may get the nomination of Fed vice chair.
Some officials even put the possibilty of a fourth and more hike in 2022 into play.
"My forecast is that we'd have a 25-basis-point increase in March barring any changes in the data," Philadelphia Fed President Patrick Harker said.
"Lifting off in March... seems quite a reasonable thing," San Francisco Fed President Mary Daly on Thursday.
Atlanta Fed President Raphael Bostic, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester also flagged a March rate hike on Wednesday.
Governor Christopher Waller was way ahead of most of his colleagues in repeatedly calling last year for a March start to three rate hikes in 2022, and said Thursday a rapid-fire series of four or five rate hikes could be called for if inflation doesn't recede.
This week is the last before Fed officials enter a no-comment "blackout" period ahead of their Jan. 25-26 policy meeting.
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