English
Markets are waiting for the Fed's signals... and a correction wave is on the horizon
The first meeting of the Federal Reserve this year kicks off today, which is expected to extend over two days to decide the future of the central bank's monetary policy and give indications about the number of times the Federal Reserve will raise interest rates.
Investors' attention will be focused during the meeting on the tone that Jerome Powell will follow, especially with the sharp fluctuations in stock markets since the beginning of the year.
The discrepancy about the number of interest rate hikes is clouding analysts’ expectations, as Goldman Sachs expects the bank to go to raise interest rates 4 or more times during the year, referring to the reflection of the spread of the Corona virus on the exacerbation of the increase in prices and the rise of inflation in America to its highest level in 40 years, which may push The Federal Reserve to accelerate the pace of interest rate hikes.
JPMorgan CEO Jamie Dimon, in turn, stated that he would not be surprised if the bank went to raise interest rates more than 4 times this year, pointing to the possibility of inflation recording levels higher than the Fed's previous expectations.
The CEO of Pershing Square Capital Management, Bill Ackman, indicated that the Fed should raise interest rates by 50 basis points in March in order to restore its credibility, referring to a more hawkish policy.
It is noteworthy that, the last Fed rate hike dates back to the end of 2018, before the Fed began a record rate cut in March, due to the Corona pandemic, in addition to taking exceptional measures that doubled the Fed’s assets to exceed $ 8.8 trillion.
