4 ms·

Ask HN: Fed Rate Hike today – 50, 75 or 100 BPS?

31 points by aruanavekar 4y ago

Any predictions on how Fed will react and the possible impacts and outcomes of the Fed rate hike?

Bostonian 4y ago
The WSJ and some investment banks have said 75bp is likely. That's my guess, although 50bp is also possible. The Fed does not like to shock the markets, so I think 100bp is very unlikely. I wonder how high Fed Funds will have to go. The Fed Funds futures market prices a 3.8% rate by May 2027. Historically, Fed Funds has risen to at least the level of inflation, which is currently 8.6%, during a tightening cycle.
digianarchist 4y ago
Pretty sure it will be 75bps at this point. Bank of Canada will be making the same move in July.
hnthrowaway0328 4y ago
50bps. Fed rarely surprises the market (so either 50bps or 75bps) plus 50bps gives the market a bit of breath that it needs, given that it got hammered pretty badly.
- krallja 4y ago
  it is 75 and so far stocks are up
  - hnthrowaway0328 4y ago
    Yeah I got the rate wrong :(
jackallis 4y ago
def 50 bps. i will be very shocked if it is not 50bps. NOw, 0.75bps is questionable but given how behind fed is it is probable but they are in the business post '08 of not surprisng the market.
- sentirist 4y ago
  Well prepare to be shocked then.
- krallja 4y ago
  are you shocked
  - jackallis 4y ago
    very much so after all the appeasing by Mr. Powell that 0.75 is dramatic. This u-turn makes me nervous because 1. he said inflation was transitory 2. oh, we wont' raise interest rate fast 3. crap, we are behind lets go 0.50bps 4. my god, we are really really behind, lets go 0.75bps and mother of all 5. no recession here, economy is strong, solid job #. Recession is coming folks.
- atian 4y ago
  you should be shocked right now!
gjreda 4y ago
Expectations are overwhelmingly for 75bps. Prior to yesterday, 50bps was expected. - https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to...
- sentirist 4y ago
  Exactly. Not sure what the point of these articles are with the futures implied probability. The probability right now of 225-250 for July is incredible as well.
ArtWomb 4y ago
Treasuries historic extreme overbought. Perhaps peak? Retreated in Fed expectation for 75bp hike now and july priced in. Thats massive tightening! No need for panic, just a bumpy landing. Just realize inflation is beyond any one institution's control and we now have competition. Alternate monetary tools in synthetic and digital currencies designed to stabilize prices ;) https://quotes.ino.com/charting/?s=CBOT_ZN.M22 https://quotes.ino.com/charting/?s=CBOT_ZN.M22
jmoak3 4y ago
0.75 after all https://www.wsj.com/livecoverage/federal-reserve-meeting-interest-rates-june-2022 https://www.wsj.com/livecoverage/federal-reserve-meeting-int...

31 points by aruanavekar 4y ago

Any predictions on how Fed will react and the possible impacts and outcomes of the Fed rate hike?

The WSJ and some investment banks have said 75bp is likely. That's my guess, although 50bp is also possible. The Fed does not like to shock the markets, so I think 100bp is very unlikely. I wonder how high Fed Funds will have to go. The Fed Funds futures market prices a 3.8% rate by May 2027. Historically, Fed Funds has risen to at least the level of inflation, which is currently 8.6%, during a tightening cycle.

digianarchist 4y ago

Pretty sure it will be 75bps at this point. Bank of Canada will be making the same move in July.

hnthrowaway0328 4y ago

50bps. Fed rarely surprises the market (so either 50bps or 75bps) plus 50bps gives the market a bit of breath that it needs, given that it got hammered pretty badly.

krallja 4y ago
it is 75 and so far stocks are up
- hnthrowaway0328 4y ago
  Yeah I got the rate wrong :(

jackallis 4y ago

def 50 bps. i will be very shocked if it is not 50bps. NOw, 0.75bps is questionable but given how behind fed is it is probable but they are in the business post '08 of not surprisng the market.

sentirist 4y ago
Well prepare to be shocked then.
krallja 4y ago
are you shocked
- jackallis 4y ago
  very much so after all the appeasing by Mr. Powell that 0.75 is dramatic. This u-turn makes me nervous because 1. he said inflation was transitory 2. oh, we wont' raise interest rate fast 3. crap, we are behind lets go 0.50bps 4. my god, we are really really behind, lets go 0.75bps and mother of all 5. no recession here, economy is strong, solid job #. Recession is coming folks.
atian 4y ago
you should be shocked right now!

gjreda 4y ago

Expectations are overwhelmingly for 75bps. Prior to yesterday, 50bps was expected. - https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to...

sentirist 4y ago
Exactly. Not sure what the point of these articles are with the futures implied probability. The probability right now of 225-250 for July is incredible as well.

ArtWomb 4y ago

Treasuries historic extreme overbought. Perhaps peak? Retreated in Fed expectation for 75bp hike now and july priced in. Thats massive tightening! No need for panic, just a bumpy landing. Just realize inflation is beyond any one institution's control and we now have competition. Alternate monetary tools in synthetic and digital currencies designed to stabilize prices ;) https://quotes.ino.com/charting/?s=CBOT_ZN.M22 https://quotes.ino.com/charting/?s=CBOT_ZN.M22

jmoak3 4y ago

0.75 after all https://www.wsj.com/livecoverage/federal-reserve-meeting-interest-rates-june-2022 https://www.wsj.com/livecoverage/federal-reserve-meeting-int...