Federal Reserve Could Raise Interest Rates in 2022, Poll Respondents Say

Report Says Federal Reserve Will Raise Interest Rates Earlier Than Expected

(RepublicanPress.org) – Increased spending and supply-side shortages in the wake of the reopening of the nation’s economy elevated inflation to a 30-year high in October. As a result, new reports indicate economists think the Federal Reserve (Fed) should raise interest rates earlier than originally expected, particularly in light of the news that the inflationary trend will likely continue until 2024.

A Reuters poll of economists conducted from November 15 to 18 indicated that the Fed would raise rates by about 25 basic points sometime during the fourth quarter of 2022. The poll also found that a majority of economists predicted the Fed would follow up with similar rate hikes in the first and second quarters of 2023. However, roughly two-thirds of the economists polled said they thought the Fed would be better off increasing rates no later than the end of September 2022.

Interestingly, market analysis company Bloomberg reported on November 18 that JPMorgan Chase & Co. economists predicted the Fed will implement a rate hike in September 2022. JPMorgan also predicted the Fed would raise interest rates again in December 2022 and once in each subsequent quarter until the inflation-adjusted rate returns to zero.

Then, on November 22, Bloomberg reported traders were “pricing in a ramp-up in tapering bond purchases” in the wake of President Biden’s decision to extend Fed Chairman Jerome Powell’s term for an additional four years. As a result, traders started pricing 2022 and 2023 contracts based on the assumption the Fed would start rate hikes in June 2022.

One point remains clear throughout all these reports; if they’re correct, the Fed could raise rates sometime in 2022 to offset runaway inflation. Fasten your seatbelts.

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