Numerous people have begun to wonder when the U.S. Federal Reserve will stop raising the benchmark bank rate after doing so seven times in 2022. The federal funds rate increases are meant to help the Fed achieve its stated objective of bringing inflation down to the 2% target. However, according to American macroeconomist and Fed watcher Zoltan Pozsar, the Fed will resume quantitative easing (QE) by the summer. By February, according to Bill Baruch, an executive at the futures and commodities brokerage firm Blue Line Futures, the Fed will stop raising interest rates.
In the United States, inflation rose sharply in 2017, although it has already begun to decline. Investors and economists believe the Federal Reserve will alter course this year after seven rate hikes. The president of Blue Line Futures, Bill Baruch, told Kitco News producer and anchor David Lin in an interview that the U.S. Federal Reserve is likely to stop monetary tightening in February. Baruch mentioned manufacturing figures and cited the drop in inflation as contributing factors to his forecast.
Baruch told Lin, “I think there is a good chance we won’t see the Fed rise at all in February. In the first week of February, “We could see something from them that would surprise the markets.” But Baruch emphasized that while there will be “volatility” in the markets, there will also be a significant rally. The rate increases, according to Baruch, “were aggressive,” and “there were indicators in 2021 that the economy was set to stall,” he added. Baruch also said
However, the Fed’s continuous rate hikes were what knocked this market hard.
Repo Guru Predicts Federal Reserve Will Restart Quantitative Easing in the Summer Under the ‘Guise’ of Yield Curve Controls
Analysts are divided on whether the Federal Reserve will decide to increase the federal funds rate or change its strategy. According to Bill English, a finance professor at the Yale School of Management, it is challenging to predict the Federal Reserve’s intentions for rate increases in 2023.
It’s not difficult to envision scenarios in which rates end up getting raised significantly the following year, according to English. It’s also feasible that they’ll wind up lowering rates much further if the economy really contracts and inflation declines significantly. It’s challenging to have faith in your outlook. You should try to balance the risks as best you can.