APRIL 25, 2022 – THE FED IS POISED TO QUELL INFLATION
Federal Reserve Chairman Jerome Powell is determined to tame inflation and raise rates “expeditiously” with an aggressive rate hike anticipated next week. It is expected the Fed will move rates up by 0.5 percent at their next meeting as prices are rising at their fastest pace in over 40 years. Inflation is now running at an 8.5 percent annualized rate.
This is not a surprise as the Fed has been indicating for weeks that rates need to go up faster than usual. A 50-percentage point increase next week is almost a certainty with 97.6 percent likelihood according to the CME’s FedWatch. It is expected the fed funds rate will be 2.75 percent by year end.
Powell says it’s essential to restore price stability and admits the road there will be challenging. Along with rate hikes, the Fed will begin to reduce its balance sheet holdings, which currently stand at $9 trillion.
You still have time to lock in these historically low rates before the Fed’s meeting on May 3-4. Take a moment to review your lending needs; as we move into a rising interest rate environment, an interest rate hedge today can help you better manage your future debt obligations.