0.5% interest rate hike in may. Up to 8 more hikes this year, resulting in EoY rates between 2.5% and 3.75% possible. (At 3.75%, that increases US deficit by $900 billion per year at current debt levels)
Fed aggressively running with QT - i.e. selling their reserve assets. This would result in all banks having less reserves, so less money available to markets, treasuries and bonds left without bank owners and can lead to banks defaulting on liabilities (happened in 2019).
Heavy recession expected if the Fed sticks to this plan
Basic takeaways:
- 0.5% interest rate hike in may. Up to 8 more hikes this year, resulting in EoY rates between 2.5% and 3.75% possible. (At 3.75%, that increases US deficit by $900 billion per year at current debt levels)
- Fed aggressively running with QT - i.e. selling their reserve assets. This would result in all banks having less reserves, so less money available to markets, treasuries and bonds left without bank owners and can lead to banks defaulting on liabilities (happened in 2019).
- Heavy recession expected if the Fed sticks to this plan
Basic takeaways:
0.5% interest rate hike in may. Up to 8 more hikes this year, resulting in EoY rates between 2.5% and 3.75% possible. (At 3.75%, that increases US deficit by $900 billion per year at current debt levels)
Fed aggressively running with QT - i.e. selling their reserve assets. This would result in all banks having less reserves, so less money available to markets, treasuries and bonds left without bank owners and can lead to banks defaulting on liabilities (happened in 2019).
Heavy recession expected if the Fed sticks to this plan