JPMorgan Economist Expects Fed To Raise Benchmark By 75bps As Global Markets Bleed – Bitcoin Economics News

The US Federal Reserve is expected to raise the federal funds rate during its next meeting on Wednesday, and JPMorgan economist Michael Firoli believes that higher inflation will prompt the Fed to raise the rate by 75 basis points. Last week, CME Group data indicated a 95% market pricing probability that the US would see a 50bps rate hike this month. Although some expect the Fed to be hawkish, some believe the US central bank may act with caution if markets worsen.

Global markets shudder with focus on Fed’s next rate hike – JPMorgan economist forecasts 75 basis point hike

Major US stock indexes and cryptocurrency markets fell significantly on Monday, as the day marked one of the bloodiest beginnings of the week in a long time. “The S&P 500 is now in an official bear market, according to the S&P Dow Jones Indexes,” CNBC’s Scott Schneper said Monday.

JPMorgan Economist expects the Fed to raise its benchmark interest rate by 75 basis points as global markets bleed

The value of precious metals such as gold and silver also decreased, as the price of an ounce of gold decreased by 2.67%, and the price of silver decreased by 3.58%. The entire crypto economy lost 18% on the day on Monday, with BTC dropping below $21,000. For now, all eyes are on the upcoming Federal Open Market Committee (FOMC) meeting where members of the Federal Reserve system are expected to raise the federal funds rate.

JPMorgan Economist expects the Fed to raise its benchmark interest rate by 75 basis points as global markets bleed
5 minute chart for BTC/USD at 10:15 PM (ET) on Monday, June 13, 2022.

Moderate increments can range from 25 to 50 bits per second. The Fed could rise to 75 to 100 basis points during the next meeting and Some expect 75 basis points in cards. Last week, CME Group data showed that the market is priced with a 95% chance that the Fed will raise its benchmark interest rate by 50 basis points. However, JPMorgan economist Michael Feroli believes that a 75 basis point increase is coming and 100 basis points is also possible.

Feroli told clients in a note on Monday that a “staggering rise in long-term inflation expectations” could prompt the Fed to raise the rate by 75 basis points on Wednesday. “One might wonder if the real surprise would actually be to raise 100 basis points, which we think is a non-trivial risk,” Feroli added.

Goldman Sachs economists forecast a 75 basis point rise – JPMorgan strategist Marko Kolanovic thinks a subtle surprise could happen

Goldman Sachs economists agree with Feruli because they believe a 75 basis point hike is likely to be announced at the FOMC meeting. “The Fed’s forecast is revised to 75 basis points in June and July,” Goldman economists explained on Monday.

A Goldman Sachs analyst note to investors adds:

We expect two more price increases in 2023 to 3.75-4%, followed by one cut in 2024 to 3.5-3.75%. We expect a 50 basis point increase in September, followed by 25 basis point increases in November and December, with a flat final rate of 3.25-3.5%. We expect the average point to appear 3.25-3.5% at the end of 2022.

Meanwhile, despite Feroli’s forecast of 75 basis points, JPMorgan’s Marko Kolanovic told the press that the US is likely to avoid a recession. Strategist at JPMorgan Chase & Co. He made it clear that the Fed may act cautiously in the future due to the madness in the bond markets and the stock markets as well.

“Friday’s strong CPI reading that led to an increase in yields, combined with the selling of cryptocurrencies over the weekend, is weighing on investor sentiment and sending the market lower,” Kolanovic detailed a note to clients on Monday. “However, we believe market repricing has gone too far, and the Fed will be pessimistic about what is now priced in the curve,” added JPMorgan’s strategic analyst.

Tags in this story

CME Group, CPI, Digital Currency Markets, Dovish, Economy, Economics, Federal Reserve, Federal Reserve, FOMC, Goldman Sachs Economists, Hawkish, Inflation, JPMorgan Economic, JPMorgan Strategic, Markets, Markets Shudder, Marko Kolanovic, Michael Feroli, Moderate , forecasts, stock markets and the US economy

What do you think of the upcoming FOMC meeting and the next rate hike? Do you think it will be moderate or aggressive? Or do you think there is a dove surprise in the cards? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for News about the disruptive protocols emerging today.

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