J.P. Morgan: Chair Powell doesn't rule out more than four hikes this year

J.P. Morgan: Chair Powell doesn't rule out more than four hikes this year

January 31, 2022

Interest Rates Fed
Federal Reserve Washington.png

Federal Reserve (Fed) Chairman Jerome Powell delivered a hawkish surprise at the press conference of the Fed’s January meeting. On interest rates, Powell confirmed that liftoff looks set for March and stressed that the path of future rate hikes is going to be highly dependent on incoming economic data.

Chair Powell also acknowledged that this is a different economy to that of the last tightening cycle and that policy will reflect those differences. These comments mean that the Fed is not ruling out hiking more than once a quarter and as a result markets have now moved to price more than four rate hikes this year. Should US inflation continue to prove more persistent than the Fed forecasts, then investors can expect this to be met with more frequent interest rate rises.

Number of 25 basis point hikes priced for the Fed in 2022

31012022 J.P. Morgan

Source: Bloomberg, J.P. Morgan Asset Management. Data as of 27 January 2022.

Related posts