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>> You shared my exact sentiment. 0.25% is far too small. Most reports were doubling the rate to 4% or greater. I think after the talk of moving it up that fas
by at-fates-hands 5y ago
>> You shared my exact sentiment. 0.25% is far too small.
Most reports were doubling the rate to 4% or greater. I think after the talk of moving it up that fast and that drastically, a lot of investors started getting the jitters:
https://www.cnbc.com/2022/02/23/the-market-has-adjusted-its-views-of-how-the-federal-reserve-will-raise-interest-rates.html https://www.cnbc.com/2022/02/23/the-market-has-adjusted-its-...
That change came after traders had been pricing a move double that size at the March 15-16 Federal Open Market Committee meeting. Central bankers have been dousing the idea of needing to go up 50 basis points at the meeting, with New York Fed President John Williams saying last week that there is “no compelling argument” for the move.
Still, it hasn’t made investors any less nervous about what the path ahead will look like.
“I’m not so worried about whether they do 50 [basis] points out of the gate or not. But I also think they shouldn’t overdo it here,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “You can do 25, and if you want to do another one soon, you can do it, rather than add additional disruption or uncertainty.”
I can understand the idea of going slowly and evaluating the effect on the current markets with inflation still going on. I like the cautious approach considering the massive fallout if it did suddenly jump up to 4%, you'd see a ton of money get pulled out of the market which could be disastrous.
But like you said, either way could lead to another staggering recession so I'm not 100% confident in either approach.