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Uncertainty Surrounds Federal Reserve’s Future Plans for Rate Hikes – Bitcoin News

Uncertainty Surrounds Federal Reserve's Future Plans for Rate Hikes

The U.S. Federal Reserve has raised the benchmark bank rate seven times during the course of 2022, leading many to question when the central bank will cease or change course. The Fed has stated that it aims to bring inflation down to the 2% target, and the increases to the federal funds rate are intended to move toward this goal. However, Zoltan Pozsar, a U.S. macroeconomist and observer of the Fed, predicts that the central bank will start quantitative easing (QE) again by summer. Bill Baruch, an executive at Blue Line Futures, a futures and commodities brokerage firm, anticipates that the Fed will halt rate hikes by February.

Experts Weigh In on Possibility of Pausing Rate Hikes and Restarting Quantitative Easing

Inflation in the U.S. saw a significant increase last year, but has since slowed. After seven rate hikes from the central bank, investors and analysts anticipate that the Fed will change course this year. In an interview with Kitco News, Bill Baruch, president of Blue Line Futures, told Kitco’s anchor and producer David Lin that the U.S. Federal Reserve is likely to halt monetary tightening in February. Baruch pointed to the decrease in inflation and cited manufacturing data as one factor in his prediction.

Uncertainty Surrounds Federal Reserve's Future Plans for Rate Hikes
“History cautions strongly against prematurely loosening policy,” Jerome Powell told reporters in Aug. 2022. “We will stay the course until the job is done.”

“I think there is a good chance that we don’t see the Fed hike at all in February,” Baruch told Lin. “We could see something from them that would surprise the markets in the first week of February.” However, Baruch emphasized that markets will be “volatile,” but also will see a strong rally. Baruch stated that the rate hikes “were aggressive,” and he noted that “there were signs in 2021 that the economy was ready to slow.” Baruch added:

But with the Fed hiking those rates right through, that’s what slam-dunked this market down.

Repo Guru Predicts Federal Reserve Will Restart Quantitative Easing in the Summer Under the ‘Guise’ of Yield Curve Controls

There is some uncertainty among analysts as to whether the Federal Reserve will choose to raise the federal funds rate or pivot in its course of action. Bill English, a finance professor at the Yale School of Management, explained to that it is difficult to be certain about the Federal Reserve’s plans for rate hikes in 2023.

“It’s not hard to imagine scenarios where they end…

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