that the Fed could hike in bigger steps than the 25-basis point bump last week. Further, it may raise rates beyond what is considered the neutral level at which monetary policy is neither helping nor hurting the economy. The Fed’s latest median forecast for next year’s rate is 2.8%, compared to what Piper Sandler estimates as the nominal neutral rate of around 2%.
Investors have taken notice of the big rhetorical U-turn on easy money policies. The yield curve on the Eurodollar, which can be a window into what the market thinks the Fed will do, hit a peak of 2.96% in June 2023 as of Thursday morning. But then it inverts in the second half of 2023, suggesting that investors think longer term rates will be lower than short term ones.
hmm....pada bergetar lutut hadapi emak-emak.... hehehehe.....
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