2023-06-17 19:37:24
The interest rate hike halted
The Federal Open Market Committee halted a series of interest rate hikes on Wednesday, but policymakers expected them to rise higher than expected in the face of surprisingly persistent price pressures and labor market strength.
Meanwhile, short-term inflation expectations in the US fell in early June to their lowest level in more than two years, which helped boost consumer sentiment.
Jerome Powell: We may go back to raising rates again to control inflation
Fundstrat head of research Tom Lee said in a note on Friday that price increases could ease, perhaps this year amid a decline in the housing or rental component of the CPI. He added that the stock market is beginning to accept this view, and this may explain many of the gains since the beginning of the year.
“The Fed can end this inflation war when people generally believe that the thorn in inflation has been broken,” Lee added. His closest guess is that this will happen; is that it will be sometime in 2023.
On the other hand, Goldman Sachs supports those who view that the price increase will remain constant. The bank’s strategists recommend that investors buy one-year swaps to bet that inflation will be higher than current market expectations.
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