The Fed Is Leaning Towards a 0.75% Hike

The stock market is having a good morning so far. The S&P 500 is currently up 0.79%.

More banks are reporting earnings. This morning, Goldman Sachs said it made $7.73 per share. Wall Street had been expecting $6.58 per share. Bank of America made 73 cents per share. That was five cents below estimates.

Yesterday, the Wall Street Journal reported that the Fed will raise interest rates by 0.75% at its meeting next week. There had been some speculation that the Fed would go for a full 1% increase.

From the WSJ:

On Friday, a University of Michigan survey of consumers’ long-term inflation expectations fell to its lowest level in a year, which weakened the case for a 1-percentage-point rate rise. Fed officials keep a close watch on households’ and businesses’ expectations of future inflation because they believe such expectations can be self-fulfilling.

Market-based measures of future inflation have also drifted to their lowest levels since Russian President Vladimir Putin’s invasion of Ukraine in late February.

“They can take comfort from that,” said Laurence Meyer, a former Fed governor. “This takes the pressure off of them. I don’t think they want to go 100.”

Posted by on July 18th, 2022 at 10:04 am


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