JP Morgan: 9 interest rate hikes until March ’23

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JP Morgan: 9 interest rate hikes until March ’23

James Bullard, president of the Federal Reserve’s branch in St. Louis, is perhaps the most prominent speaker among the voices calling for a more vigorous rate hike. According to him, in March it should be raised by 0.5 at one time and so again before July. But he is not the only member of the Fed who believes that despite Chairman Powell’s statements, the attitude needs to be further changed.

Thus, Loretta Master of the Cleveland Delivery spoke of “more aggressiveness” and also just now Charles Evans of the Chicago branch spoke out on the “substantial change” of the Fed’s “wrong” approach, given the high inflation rates (7.5% in January, a 40-year high) ), With the debate remaining as to which components of the consumer price index show a temporary rise that will fail to maintain its pace, and if at all, how long will it take for these items to calm down.

For example, Amir Kahanovitz, the chief economist of Phoenix Excellence, wrote in his review that we understood here that “deep down everyone knows that the Fed can not really beat inflation, and if it does get cold it will not be thanks to him.” “Interest rates are not the effective limit for expansion,” he argued, explaining that “retail sales in the United States jumped 3.3% in January and industrial production expanded less, by 1.4%. If these cool down, the companies will hardly notice. ”

Goldman Sachs, which previously thought it would see “only” five interest rate hikes on the Fed, now believes the number will stand at 7 by the end of the year. The Bank of America is also signing this scenario, which means raising each of the interest rate decisions at the Fed’s Monetary Committee meeting.

In JP Morgan, they also see things this way, and if we look into the beginning of 2023 as well, we will see two more raises by March. That is, from now until then – 9 interest rate increases, at a rate of 0.25 in each of the interest rate decisions, so that next March the interest rate will be 2.25%.
A look at the U.S. government bond market shows that the market is priced at a 64% increase of 0.25 at the next Fed meeting in March, and a 36% scenario of an increase of 0.50 at once.

According to commentators, on the face of it the dilemma of the Fed and headed by Powell is whether to sacrifice growth on the altar of interest. That is, will an increase in interest rates due to inflation eventually lead to a slowdown in the recovery of economic activity – people will lend less for consumerism, businesses will lend less for investment in favor of business growth and the like.

Even before JP Morgan’s recent review, the Investment Bank updated their global growth forecast with the release of US Inflation Data. They now expect that in the current quarter the world economy will grow by 5.7% compared to the same period last year. Their previous forecast assumed slower growth of 3.5%.

“We are no longer expecting a slowdown in growth from the rate we saw in the previous, last quarter of 2021, which reflected a rate that was almost at a record high,” according to the bank’s senior economist, Bruce Kassman and other writers. According to him, inflationary pressures on the energy side will subside, but other data suggest that inflation is still expanding “and a loop has been created between strong growth, pressures on market costs, and private and public sector behavior.”

He further writes that “in our opinion the risk before the central banks, who believe in the need to maintain slow growth, as well as the impact of this on global financial conditions, is the most significant risk on the healthy background of the world economy.”

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  • 2.

    The d





    What an exaggeration Elk 9 cost until March interest rate 1.25 to March no more


  • 1.

    What about the bonds? Should I go out? (LT)

    Of 2




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