Economists at JP Morgan and Goldman Sachs said in client notes Monday that they now expect the Federal Reserve to raise its policy rate by 75 basis points on Wednesday. Or could it even be 100?
Economists at JP Morgan and Goldman Sachs said in client notes Monday that they now expect the Federal Reserve to raise its policy rate by 75 basis points on Wednesday.
A 100-basis-point hike would increase the fed-funds rate by 1% from its current 0.75% to 1% target range. “The Fed has to rein in demand by reducing excess liquidity,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, by phone. While he noted the central bank can’t control supply imbalances, it can control demand by raising rates, which makes it more expensive for households to spend on credit.
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