{"id":1651602,"date":"2022-09-21T14:52:54","date_gmt":"2022-09-21T18:52:54","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1651602"},"modified":"2022-09-21T14:53:02","modified_gmt":"2022-09-21T18:53:02","slug":"aggressive-fed-hikes-rates-another-75-bp-surprising-no-one","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/aggressive-fed-hikes-rates-another-75-bp-surprising-no-one\/","title":{"rendered":"Aggressive Fed hikes rates another 75 bp, surprising no one"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Faggressive-fed-hikes-rates-another-75-bp-surprising-no-one%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1651602&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>NEW YORK (Reuters) \u2013     The Federal Reserve raised its target interest rate by three-quarters of a percentage point to a range of 3.00%-3.25% on Wednesday and signaled more large increases to come in new projections showing its policy rate rising to 4.40% by the end of this year before topping out at 4.60% in 2023 to battle continued strong inflation.<\/p>\n<p>The U.S. central bank\u2019s quarterly economic projections, meanwhile, showed the economy slowing to a crawl in 2022, with year-end growth at 0.2%, rising to 1.2% in 2023, well below the economy\u2019s potential. The unemployment rate is projected to rise to 3.8% this year and 4.4% in 2023. Inflation is seen slowly returning to the Fed\u2019s 2% target in 2025.<\/p>\n<p>STORY:<\/p>\n<p>MARKET REACTION:<\/p>\n<p>STOCKS: The S&#038;P 500 briefly turned lower then was up 10.82 points, or 0.28%, at 3,866.75<\/p>\n<p>BONDS: Benchmark 10-year note yields briefly spiked then fell. The price rose 4\/32 to yield 3.5573%, from 3.573% late on Tuesday. The 2-year note yield surged. The note was last off 5\/32 in price to yield 4.0506%, up from 3.964%.<\/p>\n<p>FOREX:  The dollar index extended gains then settled a bit, showing gain of 0.726%, with the euro down 1.04% to $0.9866.<\/p>\n<p>COMMENTS:<\/p>\n<p>MATT STUCKY, SENIOR PORTFOLIO MANAGER, NORTHWESTERN MUTUAL WEALTH MANAGEMENT COMPANY, MILWAUKEE, WISCONSIN<\/p>\n<p>\u201cThe big takeaway here is not so much the decision to raise by 75 basis points. In terms of discussion in the statement, we have been thinking about the Federal Reserve policy as moving in one direction but increasingly, as they\u2019ve moved into hawkish territory as markets have started to pencil in a terminal fed funds rate in 2023 approaching four and a half percent, that we might start to get at least an acknowledgement that the risks are becoming two-sided in terms of monetary policy stance. Certainly there are risks of inflation, but the opposite side of that is there are risks to the overall economy\u2026there continues to be, at least so far, not any kind of concrete acknowledgement that risks are growing to the forward economic outlook\u2026 The Fed remains singularly focused on fighting inflation. So this is a pretty hawkish 75 basis point increase when it comes to how the text reads.\u201d<\/p>\n<p>LINDSEY BELL, CHIEF MARKETS &#038; MONEY STRATEGIST, ALLY \u00a0\u00a0<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u201cThe 75 basis points increase was expected. What the market is reacting to is the update to expectations for rates for the out-years. They moved significantly higher \u2026 The market would\u2019ve liked to see the number come down in 2023. What it\u2019s telling us is that the Fed is expecting to rates to continue to move higher into 2023.\u201d<\/p>\n<p>\u00a0\u00a0\u00a0 \u201cThe silver lining is that six members think rates are going to stay steady and one thinks they can come down in 2023.\u201d<\/p>\n<p>\u00a0\u00a0\u00a0 \u201cNow the question is what is the market is going to price in here. What do we really believe will happen? There\u2019s a camp that says whatever the Fed guides to has typically been the floor and not the ceiling. This communication is basically signaling that the Fed\u2019s going to continue to be aggressive and remain hawkish.\u00a0That\u2019s going to continue to put pressure on stocks. It doesn\u2019t leave a lot of room to the upside for investors going into the end of the year.\u201d<\/p>\n<p>\u00a0\u00a0\u00a0 \u201cRight now it doesn\u2019t feel great because the Fed\u2019s going to stay hawkish. They\u2019re not backing down. Where we end the day is going to be predicated on Powell\u2019s speech.\u201d<\/p>\n<p>BRIAN JACOBSEN, SENIOR INVESTMENT STRATEGIST, ALLSPRING GLOBAL INVESTMENTS, MENOMONEE FALLS, WISCONSIN<\/p>\n<p>\u201cThe unusual has become usual. Not only did the Fed hike another unusually large 75 bps today, it is basically saying it will do it again in November. Thinking that these types of hikes aren\u2019t going to cause pain down the road is the triumph of hope over experience.\u201d <\/p>\n<p>ELLEN HAZEN, CHIEF MARKET STRATEGIST, F.L.PUTNAM INVESTMENT MANAGEMENT, WELLESLEY, MASSACHUSETTS <\/p>\n<p>\u201cThe stock market is taking this in stride, it did go down a little bit but it\u2019s not too dramatic. The updated statement of economic projections suggest that the Fed is reluctantly, slowly, catching up to reality in terms of their anticipation for everything \u2013 for inflation, for core inflation, for GDP. You look at the difference between December, to march, to June, to now, in all of those metrics and what they are projecting and they are finally catching up with what the market has already known for quite some time. So perhaps the equity market was a little bit optimistic they might soften the language, which they did not do, but in general most of this was priced into the equity market. <\/p>\n<p>\u201cA lot of times you see (the market) do something on the day of and then something else the next day, investors might want to reserve judgment until tomorrow.\u201d <\/p>\n<p>THOMAS HAYES, CHAIRMAN AND MANAGING MEMBER, GREAT HILL CAPITAL, NYC<\/p>\n<p>\u201cThis is as hawkish as it gets and the only way to back off it is in the press conference if Powell says we\u2019re going to remain data dependent.\u201d<\/p>\n<p>\u201cAs we found through history, the initial knee jerk reaction tends to be wrong. But markets really do want to see Powell signal some flexibility moving forward in order to kind of stabilize the market. So I think you want to hear him say \u2018data dependent,\u2019 \u2018flexible,\u2019 but at the same time stand firm in terms of their commitment to bring inflation down.\u201d<\/p>\n<p>RYAN DETRICK, CHIEF MARKET STRATEGIST, CARSON GROUP, OMAHA<\/p>\n<p>\u201cIt was a rather hawkish 75 basis point hike, and (the Fed) left the door wide open for even more rate hikes before the end of the year.\u201d<\/p>\n<p>\u201cThe dot plots confirm more hikes are coming than were previously expected. <\/p>\n<p>\u201cThe Fed is willing to produce a good deal of pain to the economy, and potentially to the stock market in order to rein in the runaway inflation we\u2019ve been seeing this year.\u201d<\/p>\n<p>\u201cThe economic expectations from the Fed are quite disappointing. The economy is quickly slowing.\u201d<\/p>\n<p>\u201cYields and the dollar both moved higher on the hawkish Fed stance, pressuring stocks once again.\u201d <\/p>\n<p>\u201cThe Fed is willing to produce a good deal of pain to the economy and potentially the stock market in order to rein in the runaway inflation we\u2019ve been seeing this year.\u201d <\/p>\n<p>The economic expectations from the Fed are quite disappointing, the economy is quickly slowing. The Fed is okay with this with their hawkish stance in order to slow inflation.<\/p>\n<p>The Powell press conference is coming up. He will continue to pull his inner Paul Volcker and stress how important it is to bring inflation under control, even if it potentially slows the economy and causes pain for most consumers.\u201d<\/p>\n<p> (Compiled by the U.S. Finance &#038; Markets Breaking News team)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/aggressive-fed-hikes-rates\/the-william-mcchesney-martin-jr-federal-reserve-board-building-in\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8K0Y1-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8K0Y1-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NEW YORK (Reuters) \u2013 The Federal Reserve raised its target interest rate by three-quarters of a percentage point to a range of 3.00%-3.25% on Wednesday and signaled more large increases<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1651602","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1651602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1651602"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1651602\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1651602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1651602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1651602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}