An excerpt from Marketwatch.com … [[[ The central bank also put...

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    An excerpt from Marketwatch.com …

    [[[ The central bank also put out a statement (2.00pm yesterday) to guide their eventual plan to shrink its balance sheet.

    But the key takeaway came later, from Powell’s press conference (at 2.30pm), where the chairman took a hawkish tone.

    Most notably, Powell intimated that the Fed is leaning toward more than the three quarter-point rate hikes that they penciled in last month, said Derek Holt, head of capital markets economics at Scotiabank.

    Holt has forecast the Fed is going to raise its policy rate to 2% this year.

    He said Powell’s comments give him confidence in that outlier forecast.Powell’s comments were “a pretty strong signal that they’re going to go faster than the market has priced in,” Holt said in an interview. Before Powell started speaking, the market expected four rate hikes this year.

    Holt also noted that Powell refused the opportunity to dismiss speculation that the Fed might raise rates at consecutive meetings, or hiking in 50-basis-point increments.

    “Bottom line, the risks are skewed to more than the four hikes this year,” agreed Ethan Harris, global economist at Bank of America Securities, in a note to clients. ]]]

    Dex
 
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