Traders Intend 50% Chance of Rate Hike by Federal Reserve by March 2022

Traders have anticipated a 50% possibility that there will be a rate hike by the Federal Reserve by March of 2022.  The CME Group Inc., in particular, has come out with data that has demonstrated that this rate hike should occur in March, increasing by nearly 54%.  As shown on Monday, the rate has increased by 50% from the time of December 31 until now. 

The Federal Reserve also intends to end its bond purchases that have been prevalent throughout the pandemic period, which suggests a move to have an increase in interest rates, as a defense against economic trends of inflation.

U.S. economists from places such as Capital Economics, an independent economic research firm based in London, have revealed their opinions regarding this matter. "The quicker taper will boost speculation that the Fed will begin raising rates at the mid-March meeting. That depends when officials judge the labor market is back at 'maximum employment'," Michael Pearce, senior U.S. economist at Capital Economics, said in a research note.

"On balance, we still expect that renewed weakness in the economy early next year will convince officials to delay the lift-off date to the June meeting."

Financial investors have had increasingly positive points of view regarding treasury yields all-around this past Monday, as a 10-year rate rose to its peak level in over a month. 

“Treasuries are catching up to a tighter Fed reality,” said Ben Emons in a written statement, managing director of global macro strategy at Medley Global Advisors.

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