03/03/2022
The Fed is still on track to hike rates, but expectations for a big jump have eased. As war continues in Ukraine, investors' expectations for an aggressive 50 basis-point rate hike this month have fallen to near zero, and Fed Chair Jerome Powell said he's inclined to propose an increase of 25 basis points this month.
But Powell did indicate that a half-point hike was still on the table for this year if inflation keeps running hot.
To the extent inflation comes in higher or is more persistently high than that, then we would be prepared to move more aggressively," said Powell Wednesday.
The near-term effects on the US economy as a result of the geopolitical crisis and the West's sanctions against Russia remain highly uncertain, Powell noted. He said the situation calls for nimble monetary policy.
Meanwhile, Citadel CEO Ken Griffin said in an interview this week the sanctions are hurting the US in "a profound way." He anticipates that Americans will have to shoulder steep costs for the West's sanctions on Russia.
American taxpayers are going to pay for this in the form of higher interest rates on our debt," Griffin told Bloomberg.
This means more inflation and more stability in the economy.
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