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Tags: federal reserve interest rates

Wall Street Expects Hawkish Pause From Fed

Wall Street Expects Hawkish Pause From Fed
Federal Reserve Chairman Jerome Powell (AP)

Monday, 12 June 2023 08:02 AM EDT

Most big Wall Street banks expect the Federal Reserve to keep interest rates unchanged on Wednesday, while sticking to its hawkish tone due to a strong job market and elevated inflation.

Several economists say that it is a toss-up between a skip and a hike in the June meeting. Most banks expect the central bank to prepare markets for a hike in July.

Money markets are currently pricing in a more than 70% chance of a pause this month, with rate cut expectations pushed out to next year.

Citigroup, however, is expecting the Fed to raise interest rates by 25 basis points (bps) this week any by another 25 bps in July, with a terminal rate of hike 5.5% - 5.75%

Both HSBC and UBS are expecting a 25 bps hike next month with a terminal rate of 5.25% - 5.50%.

Deutsche Bank also expects the Fed to pause raising interest rates this month, one last 25 hike in July to a terminal rate of 5.30%.

Goldman Sachs is predicting the same but is forecasting a terminal rate of 5.25% - 5.50%.

Barclays says the Fed will not raise interest rates this week but expects 50 bps of hikes through September.

Both J.P.Morgan and Morgan Stanley think the Fed is done with raising interest rates and are forecasting a 5% - 5.25% terminal rate.

BofA and Wells Fargo say the Fed will give raising rates a break this week but see a July hike as highly probable with interest rates ending in the 5% - 5.25% range.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
Most big Wall Street banks expect the Federal Reserve to keep interest rates unchanged on Wednesday, while sticking to its hawkish tone due to a strong job market and elevated inflation.
federal reserve interest rates
257
2023-02-12
Monday, 12 June 2023 08:02 AM
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