We expect the Fed to hike interest rates by 25bp at next week’s FOMC meeting and, despite the war in Ukraine, to unveil new projections showing five interest rate hikes for this year in total. We also expect those projections to show an additional four rate hikes in 2023, taking the fed funds rate to a peak of between 2.25% and 2.50%. Fed Chair Jerome Powell may offer more details in his press conference about the Fed’s plans for quantitative tightening (QT), but we don’t expect QT to be launched until closer to the middle of this year.
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