FOMC preview: Brace for impact

quick take

With the next FOMC meeting looming tomorrow, July 26, hopes are high that the Fed will raise rates by another 25 basis points.

Market estimates are that this adjustment is almost certain, with a 99% probability. This increase will put the Federal Funds rate in the range of 5.25% to 5.50%, in line with the peak interest rate observed in 2008.

Don Johnson’s Analysis suggests an unprecedented trajectory for Federal Reserve action in the current cycle. In his assessment, rate hikes during this period outpaced those in previous cycles, namely 2018, 2006, 2000, 1995, 1989, 1987, 1984, 1982 and 1960.

The table below compares historical rate hike schedules and shows the strength and speed of current rate hikes.

One of the most pressing concerns is whether a highly indebted economy can withstand such a rapid and drastic adjustment.

Fed Hike: (Source: Fed)

Post-FOMC Preview: Brace for Impact first appeared on CryptoSlate.

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