3rd of May FOMC Meeting - What Will Happen?
The Federal Reserve will hold their next FOMC meeting on the 3rd of May to decide on the next course of action to the federal funds rate, which currently stands at 4.75 - 5.00%.
- The Fed Rate Monitor Tool is showing us that the market is pricing in a 22.0% chance of a pause in rate hike, while another 78.0% probability of a 25 bps rate hike
- Bank of America analysts also support the notion of a 25 bps rate hike on the next FOMC meeting since the bank stress has started to ease, but they think a hike pause is also plausible
- Goldman Sachs analysts see the rates peaking in June instead of July as they foresee another 25 bps rate hike on May
It seems like the consensus is for a 25 bps rate hike for the next FOMC meeting which stems from the stubbornly high inflation and tight labor market, though inflation moderated slightly last month (CPI decreased from +6.0% y-o-y to +5.0% y-o-y). This is also in line with the previous FOMC projection for the fed funds rate, where they see it peaking at 5.00 - 5.25%.
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