Biggest interest rate hike in nearly 20 years expected
Several investment banks and financial services firms expect the U.S. Federal Reserve to raise interest rates by as much as 75 basis points at its meeting today, Reuters reported.
Financial services firm Goldman Sachs said it expects increases of 75 basis points in June and July, then a 50 basis point hike in September. A 75 basis point hike would be the biggest increase since 1994.
Other financial advisers like Barclays plc and Jefferies Group are also forecasting a 75 basis point hike this month. Expectations for a 75-point rise rose to 96% from 30% earlier in the week, according to the Chicago Mercantile Exchange (CME) tool Fedwatch.
While other top Wall Street investors aren’t predicting an immediate 75 basis point hike, they do believe the likelihood of a big rate hike in the coming months is growing. Standard Chartered predicted that even a 100 basis point hike was possible.
After years of low interest rates, the Federal Reserve approved a 0.25 percentage point rate hike in March, the first increase since December 2018. With inflation a top concern for both consumers and businesses, financial experts knew it was only a matter of time before the Fed raised interest rates.
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