The Federal Reserve (Fed) is widely expected to raise interest rates by 50 basis points at an upcoming FOMC policy meeting this week.
However, after that, all previous expectations will be nullified. In fact, it is possible that a larger interest rate hike will be implemented following the recent spike in US inflation.
Analysts expect more rate hikes to be implemented in the coming months as Chairman Jerome Powell and his other allies have yet to declare their victory in the fight against inflation.
Not only that, the chance of a rise of 0.75% is now also not out of the view of analysts that the Fed will implement it.
However, not everyone thinks that the Fed will act in such a way given that previously Powell has repeatedly said an increase above half the basis point is not in their consideration.
Moreover, there are also concerns that interest rate hikes by the Fed are not helping to bring down inflation, instead resulting in a recession in the US economy.
Accordingly, a follow -up statement from Jerome Powell will be the main focus of the market after the policy decision is announced on Thursday, to serve as an indication of the central bank’s further direction.
